External debt servicing for African countries: Forecasts for 2025
External debt servicing for African countries is expected to fall to $88.71 billion in 2025, marking a 13% drop from $102.59 billion in 2024. This decrease follows a downward trend that began this year, according to the “African Debt Overview” published by the NGO ONE Campaign.
A downward cycle underway, a wider fiscal space
The year 2025 marks the end of the upward cycle in external debt servicing in Africa, a phenomenon that has persisted since 2009. This decline is set to continue until 2029, when external public debt payments are expected to fall to $63.12 billion. This positive dynamic is the result of a gradual decline in interest rates, an improved economic outlook, and progress in debt restructuring.
Impact on investment and development
This reduction in external debt servicing will open up budgetary margins for African countries, enabling them to invest more in sectors essential to human development, notably education and health. These investments are crucial to achieving the continent’s Sustainable Development Goals.
External debt: evolution and composition
Since 2009, the external debt of African countries has risen sharply, from $220.51 billion to a record $685.47 billion by the end of 2023. This increase is due to growing financing needs, exacerbated by external crises such as the COVID-19 pandemic and the Russian-Ukrainian conflict. Currently, 20 low-income African countries are at risk of debt distress.
The composition of debt has changed radically, with 43% of debt held by private creditors, 34% by multilateral lenders (IMF, World Bank, ADB), and 23% by bilateral creditors.
China’s leading role in financing
China has established itself as Africa’s largest bilateral lender, with $62.86 billion by the end of 2023, well ahead of other creditor countries such as France, Saudi Arabia, Germany and Kuwait.
Conclusion
By 2025, the expected reduction in Africa’s external debt service offers favorable prospects for the continent’s economic future, enabling resources to be redirected to sectors crucial to development. However, the debt situation remains complex, and debt management, particularly from private and bilateral creditors, remains a major challenge for many African countries.
