Rising Debt Across Africa Triggers Alarm as Ghana Adds $6bn in 2024 – Report
Africa’s rising public debt has become a growing source of concern, with Ghana among countries recording significant increases, according to the latest Africa Economic Outlook report by advisory firm Bridgewater Advisors.
The report reveals that between 2010 and 2024, Africa’s public debt soared by a staggering 170%, far outpacing the global average increase of 54% over the same period. The rapid growth is attributed to a combination of global financial crises, the COVID-19 pandemic, and recent geopolitical tensions. Compounding the issue, the depreciation of many African currencies has inflated repayment costs, further straining national budgets.
Ghana’s public debt alone increased by $6 billion in 2024, the highest nominal jump in West Africa, followed by Nigeria, which added $2.5 billion. West Africa’s external debt-to-GDP ratio stood at 31%, maintaining relative stability despite a 5% rise in external funding across the region.
The report also highlighted that Nigeria now accounts for nearly half (48%) of West Africa’s total external debt stock.
To address the looming crisis, African leaders have endorsed the creation of the African Financial Stability Mechanism (AFSM), a $20 billion facility hosted by the African Development Bank. The AFSM is designed to provide concessional financing to countries committed to sound fiscal management and economic reforms.
Bridgewater estimates that the mechanism could save African nations up to $20 billion in debt servicing costs by 2035. However, the firm cautions that while the AFSM offers short-term relief, it is not a substitute for comprehensive fiscal discipline.
“Achieving lasting debt sustainability will require coordinated action across the continent, anchored in robust macroeconomic management, strengthened fiscal discipline, and improved domestic revenue mobilization,” said Prosper Melomey, Partner for Corporate Transactions & Investment Banking at Bridgewater Advisors.
Looking ahead to 2025–2026, the outlook for Africa’s external debt remains challenging. Southern Africa is expected to bear the highest debt burdens, with debt-to-GDP levels climbing from 30% to 31%, driven largely by South Africa’s fiscal imbalances and Zambia’s ongoing debt restructuring efforts.
In contrast, East, North, and West Africa are projected to maintain relatively stable debt levels around 22%, while Central Africa continues to report the lowest external debt at 3%. Bridgewater warns that without urgent structural reforms and stronger fiscal governance, many African economies risk falling into a deeper cycle of debt dependency.
