African countries are expected to borrow about $155 billion in long-term commercial debt this year to push the continent’s debt stock to $1.2 trillion.

A new report by S&P Global Ratings said the projection reflects the government’s efforts to refinance maturing debts and manage rising fiscal demands.

Egypt is expected to lead issuance, alongside South Africa and Morocco, while other economies. including Nigeria, Angola and Ghana are also projected to increase borrowing amid shifting fiscal priorities.

Last week, the International Monetary Fund (IMF) noted a changing pattern in the composition of African sovereign debts, with many countries prioritising domestic lenders.

It warned that while that comes with no less foreign exchange volatility risk, it exposes many financial systems to risks, even as most of the debts are short-term, which means a higher cost of refinancing.

The projection represents a significant rise from $140 billion recorded in 2025 and underscores growing financing needs across the continent, driven almost equally by expiring debt and budgetary pressures.

S&P said the borrowing surge would push total outstanding sovereign commercial debt above $1.2 trillion by the end of the year, equivalent to about half of Africa’s economic output.

The rating agency noted that the outlook signals a steady expansion in Africa’s debt profile as countries continue to balance development spending with existing liabilities, even as borrowing levels remain relatively modest compared to global peers.

“We expect the war and its implications for hydrocarbon shipping lanes, particularly the Strait of Hormuz, will begin moderating over the next few weeks, but if the war continues beyond that, it could impair fiscal positions, inflation profiles, and financing plans across Africa,” S&P said.

The report warned that geopolitical tensions could influence borrowing costs and plans, although the impact may be cushioned by relatively favourable liquidity conditions in global financial markets compared to previous years.

It added that many African countries, which rely heavily on imports of refined fuel, could face additional fiscal strain if retail fuel prices rise, with subsidy-dependent economies such as Angola particularly exposed to widening budget deficits.

Despite the increase in projected borrowing, S&P maintained that African sovereigns generally take on less debt than their counterparts in advanced economies. The median annual borrowing among the 27 rated African issuers stands at about $1.5 billion, reflecting the smaller size of many economies and continued reliance on concessional financing.

“Favourable external financing costs, which are at multi-year lows, provide some reprieve, as governments can refinance upcoming foreign currency maturities at lower costs,” S&P said.

The agency explained that funding from multilateral and bilateral lenders continues to play a significant role in reducing overall borrowing costs and limiting dependence on more expensive commercial debt.

However, structural challenges persist, including higher borrowing costs relative to global peers, a narrow and specialised investor base, and underdeveloped domestic financial markets, all of which constrain access to funding and heighten vulnerability to global financial shocks.

S&P added that Nigeria and Angola may see increased borrowing tied to pre-election spending pressures, while anticipated gains from oil revenues and tax reforms could fall short of expectations. Ghana is also expected to ramp up borrowing as it shifts from fiscal consolidation to renewed capital spending following austerity measures in 2025.