African sovereign debt and fiscal pressures

African nations are experiencing heightened fiscal pressure due to rising sovereign debt and interest payments, which the African Development Bank (AfDB) notes are narrowing the space for infrastructure and healthcare spending. The share of government revenue dedicated to external debt service across the continent rose from 23.7% in 2017 to 31% in 2024. This shifting landscape is further complicated by a fragmented creditor base, as Gulf states like Saudi Arabia and the United Arab Emirates increasingly act as both bilateral creditors and strategic investors.

In Nigeria, external debt servicing payments saw a 31 percent decrease in the first quarter of 2026, falling to $954.1 million from $1.39 billion in the same period in 2025. The Debt Management Office attributed this decline primarily to a reduction in principal obligations. While payments to multilateral and bilateral creditors decreased, market-related debt payments rose to $501.8 million. Additionally, Nigeria’s domestic credit market saw a 52.2 percent year-on-year increase in registered debtors during the first quarter of 2026, though this followed a sharp decline from the peak levels recorded in the fourth quarter of 2025.