July 2025

Africa’s external debt has become one of the most pressing economic issues facing the continent today. By 2025, Africa’s total external debt is projected to surpass $1.3 trillion, a staggering figure that reflects both the continent’s urgent need for development financing and the risks that come with heavy borrowing. But to address this challenge effectively, we must first understand the depth and complexity of the problem. The Debt Profile: Who Owes What? The debt burden across Africa is highly concentrated. Just six countries—South Africa (13.1%), Egypt (12.0%), Nigeria (8.4%), Morocco (5.9%), Mozambique (5.3%), and Sudan (5.2%)—hold half of Africa’s external debt. This concentration means that financial distress in any of these economies could ripple across the continent, threatening regional stability. Moreover, the debt-to-GDP ratio remains alarmingly high in many countries. Over 60% of African nations have debt levels exceeding 50% of their GDP, with some like Ghana, Cape Verde, and Sudan surpassing 100%. This ratio is critical because research shows that when public debt exceeds 50% of GDP, economic growth tends to slow down significantly, limiting governments’ ability to invest in health, education, and infrastructure. Why Are Interest Rates So High in Africa? African countries face much higher interest rates compared to Western nations for several reasons: • Currency Risk: Much of Africa’s debt is denominated in foreign currencies like the US dollar or euro. When local currencies weaken, debt repayments become more expensive, increasing the risk for lenders and pushing interest rates higher. • Private and Chinese Loans: African countries increasingly rely on private creditors and Chinese loans, which carry higher interest rates often above 3% and sometimes much higher compared to concessional loans from Western multilateral institutions that charge around 1%. • Inflation and Monetary Policy: Many African central banks maintain high interest rates to combat inflation and stabilize volatile currencies. For example, Nigeria’s central bank rate is around 27.5%, while Zimbabwe’s is even higher at 35%. • Credit Risk and Market Perception: Lower credit ratings due to political and economic uncertainties mean lenders demand higher returns to compensate for perceived risks. In contrast, Western countries benefit from stronger institutions, reserve currencies, and deeper financial markets, allowing them to borrow at much lower rates. The Impact on Economic Development High debt servicing costs are a major drain on African economies. In some countries, interest payments consume more than 25% of government revenues, surpassing spending on critical sectors like health and education. For example, Angola’s debt servicing peaked at 61% of government expenditure in 2021 before falling to 50% in 2023. This leaves fewer resources for poverty reduction, infrastructure, and job creation. A Cautious Optimism: The Medium-Term Outlook Despite these challenges, there are signs of hope. The average debt-to-GDP ratio across Africa is expected to decline from nearly 63% in 2020 to just above 55% by 2029. Debt servicing costs are projected to drop by 13% in 2025, freeing up budget space for essential investments in education, healthcare, and sustainable development. This improvement is driven by better fiscal discipline, debt restructuring efforts (like Zambia’s successful restructuring in 2024), and a more favorable global economic environment, including lower interest rates. What Must African Leaders Do? To turn the tide, African leaders and policymakers must: • Prioritize Debt Sustainability: Keep debt below critical thresholds (around 50% of GDP) to avoid stifling growth. • Shift to Concessional and Longer-Term Debt: Reduce reliance on expensive private borrowing and Chinese loans by negotiating better terms and focusing on concessional financing. • Boost Domestic Revenue Mobilization: Formalize informal sectors and improve tax collection to reduce dependence on external debt. • Enhance Economic and Financial Literacy in Leadership: Elect and empower leaders who understand economic policies, governance, and the complexities of debt management. • Strengthen Regional Cooperation: Develop regional debt frameworks to manage risks collectively and attract better financing terms. Conclusion Africa’s debt crisis is not just a numbers game; it’s a challenge that affects millions of lives. The continent’s future depends on understanding the depth of its debt problem and implementing smart, sustainable policies. With informed leadership, fiscal discipline, and strategic reforms, Africa can transform its debt burden from a barrier into a stepping stone for inclusive growth and prosperity. This article aims to shed light on the realities behind Africa’s debt and inspire action among policymakers, investors, and citizens alike. The road ahead is tough but navigable with knowledge and will, Africa can rise.

When we reflect on the men who built America, John D. Rockefeller stands out—not just for his fortune, but for his audacity and vision. Rockefeller didn’t simply extract oil; he reimagined the entire industry, controlling everything from refining to distribution. His genius lay in vertical integration, transforming a chaotic sector into an engine of national prosperity. He was bold, he was ambitious, and crucially he was unafraid to take risks that others wouldn’t. That same spirit of boldness is alive in Africa today. Aliko Dangote, often called Africa’s Rockefeller, has charted a similar course. From cement to sugar, and now to oil and gas, Dangote’s journey is a masterclass in ambition and calculated risk-taking. Where many have hesitated, he has doubled down—most recently with a sweeping investment in compressed natural gas (CNG) trucks, betting on Nigeria’s future at a time when others remain risk-averse. This isn’t just a business move; it’s a strategic bet that is already saving Nigeria billions. By shifting his logistics fleet from diesel to CNG, Dangote is tackling one of the country’s biggest economic drains: fuel and transportation costs. The numbers are staggering—CNG can cut per-kilometre fuel expenses by up to 80–90%. Multiply that across thousands of trucks, and you’re looking at potential annual savings in the trillions of naira. This isn’t just about margins for one company; it’s about stabilizing prices, easing inflation, and giving small businesses room to breathe. Yet, the real impact of such bold moves goes beyond balance sheets. They have the power to reshape entire sectors, spark new industries, and inspire a new generation of entrepreneurs. But here’s the catch: true transformation requires more than just private sector vision. It demands genuine collaboration between business and government. One of the greatest challenges facing African enterprise is overregulation. According to the World Bank’s Doing Business report, regulatory bottlenecks and policy uncertainty consistently rank among the top barriers to growth on the continent. Well-intentioned rules too often become roadblocks, stifling innovation and discouraging the very risk-taking that drives progress. If we want to see more Rockefellers and Dangotes emerge, we need regulatory environments that reward bold ideas and enable healthy competition. I’ve seen this firsthand in my own journey. Moving from upstream to downstream in the energy sector has given me a panoramic view of the value chain—from exploration to refining, logistics, and distribution. It’s one thing to extract resources; it’s another to deliver lasting value to the end user. That’s where the real transformation happens, and it’s where government and business must work hand-in-hand to clear obstacles and unlock opportunity. The lesson from history is clear: progress belongs to those who dare. Rockefeller’s America was built on risk, vision, and relentless execution. Dangote’s Nigeria is being shaped by the same principles. But for these bold moves to truly transform our continent, we must build ecosystems; open, inclusive, and competitive where innovation can thrive and the benefits are widely shared. Now is our moment. The decisions we make today about regulation, partnership, and investment will determine whether Africa’s next chapter is written by a handful of giants, or by a new generation of builders, dreamers, and doers. Let’s choose boldness. Let’s choose partnership. Let’s build the future together. If this resonates, I invite you to share your thoughts or tag someone who’s shaping Africa’s next big leap. The conversation starts here

Let’s be honest: The world sees Africa’s potential—sometimes even more clearly than we do ourselves. The latest headline? China just rolled out zero-tariff access to its market for 53 African countries. The only one left out? Eswatini, due to their stance on Taiwan. At first glance, this looks like a jackpot. Export opportunities! Market expansion! Economic growth! But before we pop the champagne, let’s ask: Who’s really setting the menu at this global dinner? The West Knows Our Worth Let’s not kid ourselves. The Western world has always recognized Africa’s value—sometimes by embracing us, other times by shutting the door with travel bans, tight immigration, and aid tied up in political red tape. When the U.S. stepped back, China didn’t just walk in—they rolled out the red carpet. But not out of love. Out of strategy. The Power of a United Africa Here’s the kicker: Divided, we’re seen as 54 fragmented markets. United, we are a force to be reckoned with. The African Continental Free Trade Area (AfCFTA) is our ticket to negotiating as one powerful bloc, not as scattered voices. Imagine what we could achieve if we approached every deal, every policy, every opportunity with an Africa First mindset. Not just exporting raw materials, but building manufacturing power, growing SME exports, and—most importantly—creating jobs for our youth. Zero Tariffs? Nice. But Let’s Not Sell Ourselves Short. Zero tariffs sound great, but they mean little if we’re just shipping cocoa beans and crude oil. The real win is in value addition—processing, branding, and exporting finished goods. And let’s not forget: If our ports, railways, and tech are foreign-owned, who really benefits? Africa Doesn’t Need Saviors. We Need Strategy. This isn’t a charity gala. It’s a chess game. And Africa has the pieces to win—if we play together. So, to my fellow African entrepreneurs, policymakers, and dreamers: Let’s seize this moment with vision, unity, and a bold Africa-first mindset. The world is watching. Let’s show them what we’re truly capable of—together.