Nigeria, Angola to borrow more in 2026 as election spending looms

Nigeria and Angola are expected to increase borrowing in 2026 as rising pre-election spending pressures government finances, according to a new report by S&P Global.

This projection comes as two of Africa’s largest oil-producing economies approach election cycles, a period that typically leads to higher public spending ahead of national polls scheduled for 2027.

“We expect Nigeria and Angola to borrow more in 2026 than last year, as additional pre-election spending will limit supportive oil sector dynamics and revenue gains associated with their ongoing tax reforms and revenue collection measures,” the report said.

The rating agency also expects Ghana to increase borrowing this year as it resumes capital spending after austerity measures implemented in 2025 following fiscal slippages in 2024.

“Ghana and Zambia also stand to benefit from renewed investor interest as they near the end of prolonged debt restructurings,” it noted. In January, the Bank of Zambia raised the limit on local currency bonds that non-residents can purchase in the primary market to 23 percent from five percent, while elevated yields have attracted significant inflows in recent months.

Although Ghana’s macroeconomic environment is improving, the government has yet to resume issuing bonds with maturities longer than one year. Yields on short-term treasury bills have also fallen sharply. S&P expects the government to gradually return to issuing longer-dated bonds to extend its debt maturity profile.

However, limited domestic savings and shallow local capital markets continue to constrain borrowing capacity across many African economies.

“Low savings rates and shallow domestic financing capacity limit local currency borrowing in many sovereigns,” the report said. “Differences in the depth and structure of African banking systems lead to wide variations in borrowing currency composition and financing costs.”

As a result, many African countries maintain a higher share of foreign-currency debt — estimated at 64 percent of total African sovereign debt.

Without access to cheaper bilateral or multilateral financing, countries such as Nigeria, Angola, Uganda, Zambia and Ghana have interest-to-revenue ratios at least double the global average of about nine percent, reflecting the high cost of borrowing.

But nations with greater access to concessional financing — including Rwanda, Madagascar, Ethiopia, Democratic Republic of Congo, Cameroon and Cape Verde — are able to maintain lower borrowing costs.

African sovereigns borrowing to reach $155 billion

Overall, gross commercial borrowing by rated African sovereigns is expected to reach $155 billion in 2026, a three-year high, up from $140 billion in 2025, driven by both maturing debt and ongoing fiscal financing needs.

However, geopolitical tensions could complicate those plans. S&P warned that the Middle East conflict involving Iran poses risks to Africa’s borrowing outlook through its impact on global supply chains and oil prices.

“The war and its implications for hydrocarbon shipping lanes, particularly the Strait of Hormuz, could impair fiscal positions, inflation profiles and financing plans across Africa if the conflict persists,” it said.

The conflict, which began on February 28, has pushed global crude prices above $100 per barrel, raising concerns about the stability of energy supply routes after tanker traffic through the Strait of Hormuz was disrupted.

According to the report, Egypt, Morocco and South Africa will continue to account for the bulk of Africa’s sovereign bond issuance, while other countries remain constrained by smaller financial systems and limited domestic savings.

Total outstanding African sovereign commercial debt is projected to rise to just over $1.2 trillion — about 45 percent of GDP — by the end of 2026, including short-term debt.