Africa is looking to finance its future—and it’s going to need a lot of investment. Despite the high cost of capital, governments, banks, and companies are pushing to expand access to global markets while deepening domestic ones. Financing costs, however, remain a challenge: heavy development needs collide with structural hurdles that keep borrowing expensive and weigh on growth.
Take a deeper dive into insights from Moody's Ratings' analysts to see how the region is tackling funding hurdles to accelerate long-term growth:
Policy, market constraints keep borrowing costs high in South Africa, Kenya, Nigeria
Debt costs have risen with policy rates during the past five years. Concessional lending from development partners helps lower foreign currency debt costs but has not fully offset high interest rates. Available in: Français
Outlook stable for Sub-Saharan African governments on solid GDP growth, revenue generation
Governments will gradually pay down debt. But funding needs remain high, market access is limited and debt affordability is weak. Alternative funding sources are helping meet refinancing needs. Available in: Français
A shift in funding mixes will help African banks manage their foreign currency costs
Banks across Africa will likely boost their reliance on syndicated and bilateral lending markets, where they can raise foreign currency at a more attractive price than in eurobond markets.
Reducing Sub-Saharan Africa’s high borrowing costs will take more than rate cuts
Smaller savings pools and less developed financial markets drive up domestic borrowing costs and push governments toward riskier cross-border debt. Reforms are underway, but progress will take time.
Credit risk and a saturated market shape access to funding in Central Africa
Access to international funds has tightened across the Central African Economic and Monetary Community, as weak public finances and political risk strain financial stability and push up funding costs.
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