Interest payments on public debt exceed government spending on health and/or education in nearly 80 per cent of sub-Saharan African countries, as rising debt-servicing costs continue to squeeze public finances, according to the World Bank.
In its October 2026 Africa Economic Update, the World Bank said interest payments averaged between 2.9 per cent and 3.2 per cent of gross domestic product (GDP) across the region between 2023 and 2026, limiting governments’ capacity to fund essential public services.
The report projects that the region’s overall fiscal deficit will narrow from 5.6 per cent of GDP in 2020 to 3.5 per cent in 2026, with a further decline to an average of 3.1 per cent in 2027 and 2028.
However, the improvement in fiscal balances has not eased the pressure on public spending, as debt interest continues to absorb a significant share of government revenue.
“In nearly four-fifths of the countries in the region, interest payments exceed public spending on health and/or education,” the report stated.
The World Bank said the region’s primary deficit, which excludes interest payments, narrowed from 3.1 per cent of GDP in 2020 to a projected 0.5 per cent in 2025. It expects fiscal accounts to approach balance by 2028.
Government revenue is projected to increase by 2.6 percentage points of GDP between 2024 and 2026, compared with a 2.3-percentage-point rise in total expenditure.
The report, however, expects only 0.4 percentage point of the increase in spending to come from non-interest expenditure, leaving limited room for governments to expand public services.
The World Bank warned that the growing cost of servicing debt is reducing resources available for infrastructure, education, healthcare and social protection.
It added that crowding out productive expenditure could slow capital accumulation, weaken productivity growth and hinder poverty reduction.
The report said the median sub-Saharan African country entered 2025 with general government gross debt equivalent to 57 per cent of GDP, nearly double the 29 per cent recorded in 2012.
Although debt ratios have declined modestly from their 2023 peak of 60 per cent of GDP, the World Bank said the regional picture masks differences between countries and growing vulnerabilities in the structure of public debt.
Domestic borrowing has become the dominant source of government financing since 2021, accounting for more than half of total public debt.
However, domestic debt typically carries higher interest rates and shorter maturities than concessional external financing, increasing refinancing risks and the cost of servicing government obligations.
The report said the debt challenge is increasingly defined by the cost of servicing existing obligations, rather than simply the accumulation of additional borrowing.
