African Government Debt Stands at 57 Percent of GDP as Net Interest Takes 14 Percent of Revenue

By The Edge Research Team

Median government debt across African economies stood at fifty seven percent of gross domestic product in 2025, about ten percentage points above its pre-pandemic level, while net interest payments absorbed fourteen percent of government revenue, according to a bulletin published by the Bank for International Settlements on Tuesday. The authors note that governments tightened their primary balances over the same period, with the median primary fiscal deficit narrowing from one point four percent of GDP in 2024 to one point one percent in 2025.

The bulletin attributes the immediate pressure to external forces. It says the conflict in the Middle East has raised energy and fertiliser prices, weakened growth and intensified fiscal pressures across the continent at a time when debt and debt service burdens were already elevated. It illustrates the fuel channel with two examples: average petrol prices in Ghana rose forty percent between the end of February and early June, from eleven cedis a litre to fifteen point four, while capped retail petrol prices in Tanzania rose about forty six percent over the same period.

The bulletin’s central argument is that the way African governments now borrow has traded one risk for another. It records that governments in low-income countries grew their share of local currency debt issuance from almost negligible levels in the early 2010s to about sixty seven percent of total debt by 2024. That shift has reduced exchange rate risk for issuers and preserved market access. The cost is that the debt is far more expensive and far shorter dated. Domestic treasury bills and government bonds in many African economies carry rates of ten to thirteen percent, against multilateral loans at concessional rates below two percent and sometimes below one. Higher rates and shorter maturities have raised debt service costs and rollover risk.

The creditor mix moved in the same direction. The bulletin’s annex records that debt owed to private creditors accounted for nearly forty percent of total external debt stocks by 2024, while borrowing from bilateral and multilateral creditors expanded only gradually over the past decade. Private lending, like domestic issuance, is priced at market rates rather than concessional ones.

Who holds the domestic debt is the third strand. The authors record that African banks’ claims on governments have nearly doubled and now average about twenty percent of their total assets, exceeding thirty percent in several economies. The median ratio of central bank claims on central government debt to government revenue rose from twenty percent to thirty percent during the pandemic and has stayed elevated. The bulletin warns that this reliance on banks and central banks for government financing can reinforce the sovereign-bank nexus, crowd out private credit and threaten financial stability, and argues that deeper markets and a more diversified investor base are essential.

Growth has not collapsed alongside this. African output grew four point four percent in 2025, up from three point seven percent in 2024.

Why it matters: The headline debt ratio is the least interesting figure in the bulletin. Fifty seven percent of GDP is not high by international standards, growth of four point four percent is respectable, and governments actually tightened their primary balances, narrowing the median primary deficit from one point four percent of GDP to one point one. The interest bill rose anyway. That combination is the whole argument: the pressure is in the cost of carrying existing debt rather than in the scale of new borrowing. The reason sits in composition. Financing shifted from concessional multilateral loans below two percent toward domestic instruments at ten to thirteen percent and private external creditors at market rates, a gap of eight to eleven percentage points on every unit refinanced, and at shorter maturities, so more of the stock turns over each year. A government can improve its primary balance and still watch its interest bill climb under those conditions, which is roughly what happened. The energy shock then works on the same pressure point from a different direction, because the two cases the bulletin cites are governments passing higher fuel costs into regulated retail prices, which lifts domestic inflation and therefore the rate demanded on the next domestic issue.

Looking ahead: The measure to watch is net interest as a share of revenue, currently fourteen percent, because it moves with rollover rather than with new borrowing and will keep rising while short domestic paper is refinanced at double-digit rates, regardless of how tight the primary balance becomes. The second is bank exposure, at about twenty percent of assets on average and above thirty in several economies after nearly doubling, which is the channel through which a sovereign problem would become a banking one. The third is the private creditor share of external debt at nearly forty percent, since market creditors reprice faster than official ones. The authors’ own prescription is structural rather than cyclical, deeper domestic markets and a wider investor base, and neither is a quick adjustment.

Sources: Bank for International Settlements, BIS Bulletin No 132, Africa’s public debt amid global headwinds: balancing resilience and vulnerabilities, by Michael Chui and Leonardo Gambacorta, 11 August 2026, and its online annex.

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