African Domestic Debt Triples to Nearly $500bn Since 2010 – Report

The value of debt issued by African countries on domestic markets increased from $150 billion in 2010 to nearly $500 billion in 2024, according to a report published on October 7 by six economists from the University of Toronto (Canada), the Kiel Institute for the World Economy (Germany), the Geneva Graduate Institute (Switzerland), the Aix-Marseille School of Economics (France), and the UN Economic Commission for Africa (ECA).

Titled “Africa’s Domestic Debt Boom: Evidence from the African Debt Database,” the report draws on a database covering more than 50,000 loans, Treasury bills, and bonds issued by 54 African countries between 2000 and 2024. Compiled from tens of thousands of official documents published by local authorities (central banks, finance ministries, debt management offices, stock exchanges) and international institutions (OECD, IMF, World Bank, among others), the database provides a detailed view of the continent’s domestic and external debt, including currencies, maturities, interest rates, creditor types, and issuance conditions.

Domestic debt refers to government-issued bonds and Treasury bills sold on local markets, while external debt covers obligations denominated in foreign currencies and loans contracted from foreign institutions. Grants and loans from regional organizations were excluded.

The report finds that Africa’s public debt landscape has undergone a major transformation over the past 25 years. The continent’s total public debt has more than quadrupled since the early 2000s, reaching $2 trillion in 2024. However, beyond the overall growth, the structure of that debt has changed significantly. While the story of Africa’s public debt has often focused on eurobonds, Chinese loans, and financing from multilateral institutions, the real transformation has taken place in domestic debt markets.

On average, African governments now raise more than half of their financing on local markets, reversing decades of reliance on external creditors. Initially driven by short-term debt instruments—particularly Treasury bills with maturities under one year—since 2022, about half of all newly issued domestic securities have maturities exceeding one year. Although multilateral loans continue to grow, their scale remains modest, as do flows from Paris Club members and other bilateral lenders. The sharp drop in Chinese lending after 2021, partly in response to Ghana and Zambia’s defaults, further shifted borrowing toward domestic markets.

Regarding borrowing costs, the data show that multilateral loans remain the least expensive source of financing, with interest rates consistently below 2% and, for many concessional borrowers, under 1%. Bilateral and Chinese loans carry slightly higher rates, while international bonds are issued at market rates and exhibit much higher volatility. Domestic bonds and Treasury bills, however, are the most expensive sources of financing on a nominal basis, with average interest rates ranging from 10% to 13%.