Debt-servicing obligations now outweigh public spending on health and/or education in nearly four-fifths of sub-Saharan African countries, according to the World Bank's October 2026 Africa Economic Update. The report found that interest payments averaged between 2.9% and 3.2% of gross domestic product across the region from 2023 to 2026, keeping sustained pressure on government budgets.
The World Bank projects the region's overall fiscal deficit to narrow from 5.6% of GDP in 2020 to 3.5% in 2026, with a further decline to an average of 3.1% in 2027 and 2028. The primary deficit, which strips out interest payments, contracted from 3.1% of GDP in 2020 to a projected 0.5% in 2025, and fiscal accounts are expected to approach balance by 2028.
Still, debt interest continues to compete directly with essential public services. "In nearly four-fifths of the countries in the region, interest payments exceed public spending on health and/or education," the report stated. Government revenues are projected to rise by 2.6 percentage points of GDP between 2024 and 2026, compared with a projected 2.3-percentage-point increase in total expenditure. However, only 0.4 percentage point of that spending increase is expected to come from non-interest expenditure, limiting room to expand public services.
The World Bank said the region's debt challenge is increasingly defined by the cost of servicing existing debt rather than the accumulation of new borrowing. The median country entered 2025 with general government gross debt equal to 57% of GDP, nearly double the 29% recorded in 2012. Although debt ratios have eased modestly from a 2023 peak of 60% of GDP, the stabilisation masks wide differences between countries and a deterioration in the structure of public debt.
Domestic borrowing has been the dominant source of government financing since 2021, accounting for more than half of total public debt. Such debt typically carries higher interest rates and shorter maturities than concessional external financing, leaving governments more exposed to refinancing pressures. The report warned that debt-service obligations are absorbing a larger share of public revenues and reducing fiscal space for infrastructure, human capital and social protection. "Crowding out productive expenditure can slow capital accumulation, weaken productivity growth, and hinder poverty reduction," it stated.
Nigeria's experience illustrates the regional pattern. The country spent approximately N16 trillion servicing debt in 2025, up 22.9% from N13.02 trillion in 2024, according to an analysis of Debt Management Office data. Between June 2023 and December 2025, Nigeria incurred N10.61 trillion in additional debt-service costs, exceeding the N6.47 trillion spent on strategic infrastructure development over the same period; the additional costs were attributed to exchange-rate depreciation and higher domestic interest rates. In the first quarter of 2026, Nigeria spent N3.14 trillion servicing domestic debt, up 20.3% from the corresponding period of 2025.
