After weathering years of successive shocks, the overall government debt in sub-Saharan Africa has stabilised, albeit at a high level.

However, the cost of servicing this debt has continued to climb, squeezing government budgets and leaving less room for vital investments in health, education, and infrastructure.

According to a report by the International Monetary Fund (IMF), a typical government in the region spends about one-seventh of its revenue on interest payments alone.

“It is in this context that domestic debt is assuming a greater role”, it stated.

The report continued that countries that approach domestic debt market development as part of a broader economic strategy are best positioned to harness its benefits and manage its risks. When domestic borrowing is a deliberate, well-planned component of a country’s financial tool kit, it can support resilience and sustainable growth

In contrast, it said countries that turn to domestic debt mainly as a crisis response—after losing access to external markets—often find themselves in a more vulnerable position.

Good Debt‑Management Practices Remain Bedrock of Continued Market Access

The article advised that good debt‑management practices remain the bedrock of continued market access and contained borrowing costs—whether borrowing at home or abroad.

It added that transparency is essential by issuing timely, accurate, and comprehensive debt statistics, and communicating effectively with investors and the public help build trust.

It also stated that strong legal and regulatory frameworks, prudent debt portfolio management, and a clear debt sustainability strategy are equally fundamental. “Addressing weaknesses in public financial management—through empowered auditors, robust governance, careful oversight of state-owned enterprises, and sound cash management—further strengthens the foundation”.