African Sovereign Debt To Hit $155bn Peak In 2026 Amid Middle East War Risks

African governments are set to ramp up borrowing to a three-year high of $155 billion in 2026, but fresh geopolitical storms in the Middle East threaten to derail these plans, warns a fresh S&P Global report.

The rating agency projects commercial long-term borrowing by rated African sovereigns will climb from $140 billion in 2025, fuelled equally by debt maturities and persistent fiscal gaps.

Yet, escalating tensions involving Iran, the US, and Israel could jolt oil markets and global supply chains, complicating the outlook.Early signs of market thaw are evident: Kenya, Côte d’Ivoire, Republic of Congo, Cameroon, and Benin have issued bonds in January-February, unlocking the Eurobond window after nearly two years of tight access.
Bloomberg figures show $5.95 billion in dollar-denominated sales so far—the region’s strongest start since 2013.S&P flags the conflict, ignited on 28 February, as a major wildcard.

“Middle East unrest and its fallout on supply chains and hydrocarbon prices risk Africa’s 2026 borrowing,” the report states. Prolonged strife near chokepoints like the Strait of Hormuz—one-fifth of global oil flows—could hammer fiscal balances, stoke inflation, and scramble funding strategies continent-wide.

Global crude has surged past $100 per barrel, snarling tanker routes and rippling into Africa. Nigeria, Egypt, Ethiopia, and Zimbabwe have hiked domestic fuel prices as import costs bite. For fuel-importing nations, this fuels transport and production hikes, reviving inflation just as it cooled.

“Rising prices strain budgets, especially with fuel subsidies, and may prompt tighter monetary policy,” S&P notes. Angola and Egypt face acute pressure from large subsidy bills, potentially ballooning deficits.

Favourable global rates at multi-year lows offer a silver lining, enabling cheaper refinancing of foreign debt.

Egypt, Morocco, and South Africa should drive most activity, leveraging bigger economies, robust financial systems, and market access. Regional sovereign commercial debt could top $1.2 trillion by end-2026—45% of GDP, including short-term paper.Median borrowing among 27 rated issuers sits at $1.5 billion annually, far below global averages, due to smaller economies and concessional loans. High costs and slim investor pools—often local banks or niche globals—add hurdles.Trends diverge: South Africa’s borrowing dips on shrinking deficits and aid, stabilising maturities near $6 billion. Senegal leans on short-term domestic debt, eyeing $10 billion total (two-thirds commercial, half local). Egypt leads the surge at $50 billion to plug widening gaps, favouring short-term domestic paper with a 30%+ GDP rollover. Post-2024 currency reforms, inflation has spiked yields, pushing interest-to-revenue ratios to 70 per cent—among the world’s highest. Still, deep local banks provide a reliable funding backstop.