African Sovereigns Pivot to MDBs as Debt Distress Risks Persist, S&P Says
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Mensah noted resilience to shocks is key as Eurobond borrowing is dollar-denominated; Benin, Kenya, Ivory Coast drove early 2026 sales at lower costs. Democratic Republic of Congo prepares maiden sale amid volatility.
S&P issued seven sovereign upgrades last year on growth/reform momentum (Nigeria turning corner despite debt service), but negatives in Senegal (CCC+ credit watch developing), Mozambique (CCC+ negative), Madagascar. South Africa BB positive.
Outlook changes tilted slightly negative, but Nigeria B- positive exemplifies reform story. Governments seek MDB support for attractive yields via highly-rated multilaterals mobilizing capital.
Recent S&P criteria changes for MDBs reduce capital intensity for low-rated sovereigns with strong repayment, potentially unlocking $600-800 billion global sovereign loans ($90-120 billion Africa pro-rata). Average African sovereign funding cost fell ~100bps to 7.7% 2025 vs 2024, masking selective pricing.
