As a share of sub-Saharan Africa's GDP, total government debt is 59%, roughly double what it was in 2012. The IMF classifies 20 countries in the region as in, or at high risk of, "debt distress". Some 32 African countries spend more on servicing their debts than they do on health care, with 25 spending more than they do on education.
In 2005 the G8 approved widespread debt relief for poor countries, putting African debt high on the international agenda. A generation ago most African debt was owed to Western governments or multilateral bodies such as the World Bank and the IMF.
While roughly a third of external debt (34%) is still owed to multilateral lenders, 43% is now accounted for by private creditors, including Western financial firms holding Eurobonds. China is the largest bilateral creditor and typically grants delays in repayment rather than permanent debt relief. The G20's Common Framework, launched during the covid pandemic to organise restructuring, has led to relief equivalent to just 7% of the net present value of the debt stock in poor countries in or at risk of debt distress, according to the ONE Campaign.
Outstanding domestic issuance has risen from $150bn in 2010 to nearly $500bn in 2024, more than from any external source, according to the Kiel Institute for the World Economy, which in 2025 launched the first comprehensive database of African debt. Around half of total government debt in sub-Saharan Africa is owed to domestic banks, according to the IMF. The Kiel Institute cites Mauritius, Nigeria, Rwanda, Tanzania and Uganda as examples of developing domestic-market depth, including longer-duration maturities.
Interest rates on domestic loans are usually three to six percentage points higher than on external concessional loans. Some governments shut out of external markets are borrowing domestically at high rates and short maturities; the Kiel Institute paper cites Ghana and Mozambique, both of which have defaulted over the past decade. Kenya, which has one of the highest ratios of debt-service costs to revenues in the world, will tap domestic markets for two-thirds of its financing needs in 2025.
Banks in sub-Saharan Africa have more than 20% of their assets in government debt, a higher share than any other region and roughly double the share in 2010. The IMF worries about what will happen if governments struggle to repay. Banks are also at risk of financial repression if inflation erodes the value of their government holdings; some domestic loans earn a real interest rate of minus 20% a year. Government borrowing may also crowd out private-sector lending needed to generate growth.
I knew one thing: as soon as anyone said you didn't need a gun, you'd better take one along that worked.