Nigeria Faces Rising Debt Risks Amid Fiscal Pressures

The African Development Bank (AfDB) has issued a report indicating that Nigeria and six other African countries are at high risk of debt distress as fiscal pressures mount. The report, titled "Africa's Macro Economic Performance Outlook," warns that despite some modest fiscal consolidation efforts, Africa's overall debt burden remains significantly elevated, posing a growing threat to long-term economic stability.

As of September 2025, Nigeria, Ghana, and South Africa are among the 13 countries categorized as high risk due to high debt servicing costs that continue to erode fiscal space, limiting public investment essential for growth. The report cautions that the combined effects of heavy debt burdens and shrinking fiscal space threaten Africa's growth momentum and structural transformation.

Additionally, rising refinancing pressures may compel governments to adopt pro-cyclical fiscal tightening, which could undermine fragile economic recoveries. The report notes that while some African countries are returning to the Eurobond market, borrowing costs remain high, exceeding pre-pandemic levels.