Africa returns to global debt market but prices stay high

Africa’s poorest borrowers, which are eligible for the World Bank’s cheapest financing, paid 9.8% interest on new bonds in 2025. African sovereigns are flooding back into global debt markets, accepting some of the world’s highest borrowing costs and adding to the debate about how investors price risk just as the continent’s new credit agency begins operations. External debt owed by low- and middle-income countries climbed 5.5% to a record $9.4 trillion in 2025, the fastest pace since 2021, according to the World Bank’s International Debt Report. Africa’s poorest borrowers, which are eligible for the World Bank’s cheapest financing, paid 9.8% interest on new bonds in 2025, nearly double the 5.5% paid by middle-income borrowers, whose rates fell. “Access to international finance has improved, but the price of that finance has not,” World Bank Chief Statistician Haishan Fu said. The report comes almost a month after the launch of the Africa Credit Rating Agency, the African Union’s most concrete answer yet to longstanding complaints that global rating agencies unfairly attach risk premiums that eat up an estimated $75 billion in additional annual interest fees.