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Sub-Saharan Africa to pay about $20bn in interest on external debt - World Bank
Sub-Saharan Africa to pay about $20bn in interest on external debt - World Bank
By: Nii Ammui Fio | 1 min read
Governments across Sub-Saharan Africa are bracing to spend approximately “US$20 billion in interest on outstanding public and publicly guaranteed (PPG) external debt” by 2025, according to the World Bank’s April 2025 Africa’s Pulse report.
The report attributes the rising debt servicing costs to the region’s changing creditor landscape. It states that “nearly three-quarters” of this interest burden will be owed to private lenders and Chinese official and private creditors, reflecting a growing reliance on non-concessional borrowing.
At the same time, the region is witnessing a sharp drop in net financial inflows. Since 2016, principal repayments have been outpacing new loan disbursements. As a result, “net external debt flows… dropped from an annual average of US$37.7 billion in 2016–19 to US$18.4 billion in 2023,” the World Bank noted.
The financial squeeze has been further compounded by rising domestic spending needs. In 2024 alone, “twenty of the 48 countries in Sub-Saharan Africa paid more in debt service than for healthcare and education combined,” underscoring the tough trade-offs governments are facing between social investment and debt obligations.
With support from multilateral lenders surging—“accounting for 80 percent of financing flows into the region since the pandemic crisis”—the report urges African governments to pursue liability management, enhance fiscal sustainability, and implement structural reforms to reduce debt vulnerabilities in the long term.
