Africa owes far less money than the United States, yet African countries struggle to pay while America keeps borrowing. The main reason is not discipline. It is the currency and the system.
The numbers look strange at first glance. US government debt passed $40 trillion in August 2026, reaching about $40.05 trillion on 18 August [1]. Africa holds only about 2 percent of the world’s public debt, which UNCTAD (the UN trade and development body) put at $102 trillion in 2024 [2]. By that rough comparison, the US owes around 20 times more than Africa.
Yet it is African governments that are forced to choose between paying creditors and paying for services. Many of them spend more on interest than on health or education. The question is why.
It is not about how much you owe
Many people assume Africa borrowed too much. The data does not support this. S&P Global Ratings expects African government debt to stay at around 61 percent of GDP on average [3]. Many rich countries owe more compared with the size of their economies.
Africa has about 2 percent of global public debt, while Asia and Oceania hold 24 percent [2]. So the size of the debt is not what sets Africa apart. The structure of the debt is.
The currency trap
The United States borrows in its own currency, the dollar. Many African governments borrow abroad in dollars or euros, because foreign lenders rarely accept African currencies. Economists call this “original sin”. It means a country cannot borrow abroad in its own money.
This creates a double risk for the borrower. The government must earn dollars, mostly through exports, to repay the debt. And if its own currency falls against the dollar, the debt becomes more expensive to repay overnight.
The US faces no such risk, because its debt is in a currency it controls.
This does not mean America can borrow without limits. Creating more money has a price, such as inflation, and US interest costs are rising fast (more on that below). But America’s debt cannot get bigger just because an exchange rate moves.
Many African governments also borrow at home in local currency. But the external part is where the exchange rate risk bites.
The cost of borrowing
Markets charge African borrowers far more. UNCTAD reports that a ten-year African government bond yielded about 9.8 percent on average. A Latin American bond yielded 7.1 percent and an Asia-Oceania bond 5.5 percent. A US ten-year bond averaged 2.8 percent between 2020 and 2025 [4].
Put simply, an African government pays more than three times what Washington pays to borrow, and about twice what a typical Asian government pays. Lenders ask for extra payment because they see these countries as riskier, often because they borrow in foreign currency and have less varied economies.
What this means for ordinary people
The debt burden reaches households. In 2023, the average African government spent about $70 per person on interest, compared with $60 on education and $39 on health [5]. In Latin America, governments spent $280 per person on interest but $323 on health and $364 on education [6].
The problem is global but heavier in some places. From 2021 to 2023, 22 countries spent more on interest than on education, and 45 spent more on interest than on health. A total of 3.4 billion people live in countries that spend more on interest than on either health or education [7].
This is money that cannot build schools, hire nurses or repair roads. It flows out to creditors instead.
The wall of debt
S&P estimates that rated African governments must repay about $90 billion of external debt in 2026, more than three times the level in 2012 [8]. Egypt alone owes about $27 billion, followed by Angola, South Africa and Nigeria [8]. This figure counts principal repayments by rated governments only, so it is not the continent’s whole debt bill.
There is some good news. S&P says African credit ratings are at their highest level since 2020 and the outlook is positive [9]. Several governments are also using buybacks, exchanges and longer repayment dates to ease the pressure [3].
Even so, the repayments are close to a peak, and they come due in hard currency.
America’s own debt problem
The US is not free of trouble. In the first nine months of the 2026 fiscal year, its net interest payments reached $827 billion, more than the $713 billion it spent on defence [1]. The $40 trillion total also includes about $7.8 trillion that the government owes to its own agencies.
Debt held by the public is about $32.3 trillion [1].
The US is also refinancing at the highest rates since before the 2008 financial crisis [10]. The difference is that investors still want dollars, so America can keep borrowing. African countries have no such guarantee.
Not only discipline, but design
Some argue African countries just need to be more careful with money. Careless spending and weak governance have played a part in some crises, and honest accounts should say so.
But discipline alone does not explain the pattern. Ghana, Ethiopia and Zambia all received large debt relief under the HIPC and MDRI programmes in the 2000s.
Within two decades, all three were back in debt distress. When global interest rates were low, they could borrow. When rates rose, their costs jumped. When the dollar strengthened, their debts grew.
This points to a financial system in which the countries that control the currency set the rules.
What can change
There are options, though none is easy. African countries can build local bond markets to borrow more in their own currencies. This reduces exchange rate risk, but it takes time and needs investor trust.
They can seek better terms through the G20 Common Framework for debt restructuring, which has been slow to deliver.
They can also support wider reform of global finance. UNCTAD has called for major reform of the international financial system to fix the imbalances facing developing countries [2].
Until that happens, African countries will keep paying more for less. The problem is not only how much Africa owes. It is also who controls the money.
Disclaimer: This article is for general information only. It does not constitute financial, policy or professional advice. Debt data and economic conditions change as new information becomes available. We welcome feedback, corrections and additional sources. If you spot an error or have an update, please contact us.
References
- [1] US National Debt Tops US$40 Trillion For First Time, Bernama
- [2] Global public debt hits $102 trillion, developing countries face mounting interest payments, Profit by Pakistan Today
- [3] Africa faces $90bn debt wall in 2026, S&P says, Engineering News
- [4] In the silence, debt crushes fragile countries, JPIC
- [5] Global public debt hits record $97 trillion in 2023, UN urges action, UNCTAD
- [6] Africa in debt crisis as donors resort to lending, The EastAfrican
- [7] UN sounds the alarm on Kenya’s high debt service costs, Mwanaspoti
- [8] Africa’s external debt repayments expected to top $90bn in 2026, S&P, Ecofin Agency
- [9] African ratings reach highest since 2020 on growth, S&P says, Financial Gazette
- [10] US national debt exceeds $40 trillion for first time, Kuwait Times
