Afreximbank Urges Nigeria to Invest in Agriculture, Manufacturing Amid Rising Debt

The African Export-Import Bank (Afreximbank) has advised Nigeria to ease its growing debt burden by prioritizing investments in agriculture and manufacturing. The recommendation comes as the bank’s latest report ranks Nigeria among Africa’s top three debtors, contributing 8% of the continent’s total external debt.
According to the African Debt Outlook: A Ray of Optimism, ten African nations account for 69% of the continent’s total external debt stock. South Africa leads the list with 14%, followed by Egypt (13%), and Nigeria (8%). Other highly indebted nations include Morocco (6%), Mozambique (6%), Angola (5%), Kenya (4%), Ghana (4%), Côte d’Ivoire (3%), and Senegal (3%).
The report attributes Africa’s rising debt levels to underdeveloped financial markets, fluctuating foreign exchange earnings, and the demand for infrastructure financing. In December 2024, Nigeria issued a $2.2 billion Eurobond to meet debt obligations, reinforcing its presence in the international capital market.
It also highlights the increasing role of private creditors in Africa’s debt structure, as institutions like the World Bank and IMF scale back lending. While Eurobonds provide immediate capital, they often come with higher interest rates and shorter repayment periods, making them a riskier financial tool compared to concessional loans.
Nigeria’s debt risk was classified as “moderate”, alongside South Africa and Morocco, but the report warns of rising borrowing costs due to tightening global financial conditions. Africa’s average borrowing cost surged to 8.2% in 2024, up from 5.4–6.3% between 2008 and 2019.
To reduce economic vulnerability, Afreximbank urges Nigeria to focus on agriculture and manufacturing, while advising Angola to invest in renewable energy. The bank also stresses the need for sustainable borrowing, improved debt management, and enhanced transparency.
“African economies must reduce fiscal deficits, prioritize efficient public spending, enhance tax revenue collection, and strengthen debt management institutions to ensure long-term financial stability,” the report states.
Despite these challenges, Afreximbank remains optimistic about Africa’s debt outlook, citing macroeconomic improvements, lower interest rates, and better access to capital markets as positive indicators of fiscal recovery.