Governments in Sub-Saharan Africa are bracing for a steep increase in interest payments on their external debts, with the World Bank estimating a total of “about US$20 billion” due in 2025.
In its latest Africa Pulse Report (April 2025 edition), the World Bank revealed that a significant share of these obligations are linked to private creditors and lenders from China. “Nearly three-quarters is owed to private creditors, and China’s official and private lenders,” the report highlighted.
The surge in debt servicing costs comes as principal repayments have outpaced new disbursements in recent years. Since 2016, countries have seen their net financial inflows plummet. The Bank explained that “principal repayments on the PPG external debt have increased at a faster pace than disbursements,” which has led to “a sharp decline in net financial flows into the region.”
By 2023, the region was receiving “only US$18.4 billion in net external debt flows,” a sharp fall from the “US$37.7 billion” average recorded between 2016 and 2019.
The changing nature of lenders has contributed to the squeeze. As financial flows from bondholders and China have turned negative, multilateral institutions have stepped in to fill the gap. “Multilateral lending has surged, accounting for 80 percent of the financing flows into the region since the pandemic,” the report noted.
Meanwhile, the burden of debt is eclipsing critical public spending. “Twenty out of 48 Sub-Saharan African countries paid more in debt service than for healthcare and education combined in 2024,” the Bank revealed.
To prevent long-term fiscal distress, the World Bank is urging African governments to take a multi-pronged approach—combining debt management reforms with revenue improvements and broader economic restructuring. However, it warns that the outlook remains uncertain without decisive action.
