Africa's public debt amid global headwinds: balancing resilience and vulnerabilities

by Michael Chui, Leonardo Gambacorta The conflict in the Middle East has raised energy and fertiliser prices, weakened growth and intensified fiscal pressures across Africa at a time when public debt and debt service burdens remain elevated. The shift towards domestic currency debt has reduced exchange rate risk for issuers and preserved market access, but higher interest rates and shorter maturities have increased debt service costs and rollover risks. A heavy reliance on banks and central banks for government financing can reinforce the sovereign-bank nexus, crowd out private credit and thre