Nigeria Among African Countries Facing Heavy Debt Repayments in 2026 – S&P Global

Nigeria Among African Countries Facing Heavy Debt Repayments in 2026 – S&P Global

Nigeria debt repayments in 2026 are expected to place the country among Africa’s major sovereign borrowers under pressure, as total external debt repayments across the continent approach $90 billion, according to a new report by S&P Global Ratings. The analysis warns that rising hard-currency obligations are straining foreign reserves and increasing refinancing risks for African governments.

Africa’s External Debt Pressures Intensify

The S&P Global report, published on Monday, shows that government external debt repayments due in 2026 are more than three times higher than levels recorded in 2012, highlighting a sharp escalation in debt servicing challenges over the past decade.

The surge reflects persistent fiscal deficits, rising borrowing costs, and growing exposure to rollover risks as global financial conditions remain uncertain.

Nigeria Among Africa’s Major Debtors

According to S&P Global, rated African sovereigns will collectively face about $90 billion in principal external debt repayments in 2026.

Key highlights include:

• Egypt accounts for nearly one-third of the total, with about $27 billion in repayments
• Angola, South Africa, and Nigeria follow as countries with significant repayment obligations
• Nigeria, while not the largest debtor, remains a major contributor to Africa’s overall debt servicing burden

The report notes significant differences across countries in debt service ratios, with sharp increases often linked to prolonged fiscal imbalances and refinancing challenges.

Rollover Risks and Fiscal Strain

S&P warned that many African governments face growing vulnerability to rollover risks, especially as they attempt to refinance maturing obligations in volatile capital markets. Hard-currency debt repayments are putting additional pressure on external buffers such as foreign exchange reserves.

Cautious Optimism in Sovereign Credit Outlook

Despite rising debt pressures, S&P expressed measured optimism about Africa’s sovereign credit outlook. Average sovereign ratings have reached their highest levels since late 2020, supported by economic reforms and improving growth trends.

However, the agency cautioned that:

• Structural reforms aimed at sustainably reducing debt will take time
• Borrowing conditions remain uneven across the continent
• Some countries, including the Republic of Congo, are offering double-digit yields that may be unsustainable

Debt Management Strategies Gain Momentum

To manage refinancing risks, several African countries are increasingly turning to liability management tools, including:

• Bond buybacks
• Debt exchanges
• Maturity extensions

Countries actively using these strategies include Côte d’Ivoire, Benin, Uganda, Mozambique, Kenya, South Africa, and the Republic of Congo.

Growth Outlook and Nigeria’s Rising Debt Stock

S&P projects average real GDP growth of 4.5% across Africa in 2026, with fiscal deficits expected to narrow slightly to around 3.5% of GDP. However, government debt levels are forecast to remain elevated at about 61% of GDP.

In Nigeria, the Debt Management Office (DMO) reported that total public debt rose to ₦152.40 trillion ($369 billion) as of June 30, 2025, up from ₦149.39 trillion ($362 billion) in March 2025.

Despite rising debt, Nigeria successfully raised $2.35 billion through a Eurobond issuance in November 2025, attracting a record $13 billion in investor demand, the largest ever for the country.

Balancing Growth and Debt Sustainability

The report underscores the challenge facing Nigeria and other African economies: maintaining economic growth while managing rising debt burdens and safeguarding financial stability amid tightening global conditions.

About Author