S&P Global Ratings has cautioned that African governments face ​rising debt risks as hard-currency repayment schedules in 2026 increase pressure on external buffers, contributing to rollover ⁠risks.

The agency's latest African sovereign outlook report published on Monday shows that government external debt repayments are now ⁠over three ‌times larger than in 2012.

"Structurally high debt and low, concentrated revenue bases will continue to pose key risks and, with government external debt repayments likely ⁠to exceed $90 billion this year, external vulnerabilities have also increased," S&P's Benjamin Young wrote in the report.

"Government external debt repayments are approaching a peak."

Egypt accounts for nearly one-third of this year's tally with $27 billion due in principal repayments, followed by Angola, South Africa, and ⁠Nigeria.

S&P noted that average sovereign ​ratings in the region have reached their highest levels since late 2020, reflecting reform momentum and improved growth. However, it ‍was a sign of key credit metrics stabilising rather than significantly improving, as structural adjustments to reduce debt burdens ​tended to require longer timelines, S&P analysts said.

Easing global financial conditions and investors seeking to diversify their investments have reopened the door for a number of African sovereigns to tap global capital markets.

However, some of them, such as Republic of Congo, had to offer double-digit yields in recent months, widely seen as too expensive for issuers, and a number of governments have resorted to off-market deals such as private placements or total return swaps.

Economic growth is projected to remain steady, with average real GDP growth forecast at 4.5% in 2026, while fiscal deficits are expected to ⁠modestly consolidate to 3.5% of GDP. Nevertheless, government debt ‌is anticipated to stay elevated at around 61% of GDP on average.

The rising debt redemption burden is leading several governments to turn to liability management strategies, such as buybacks, exchanges, and ‌maturity extensions, ⁠to reduce refinancing risks.

Notable users of such approaches include Côte d'Ivoire, Benin, Uganda, Republic of Congo, Mozambique, ⁠Kenya and South Africa.

(Reporting by Colleen Goko Editing by Karin Strohecker, Peter Graff)