Africa is losing an estimated $74.5 billion in additional debt-service costs because of exaggerated risk perceptions and what the African Export-Import Bank (Afreximbank) described as biased credit ratings. The disclosure was made at the 2026 Invest Nigeria Conference and Expo in Lagos, where stakeholders raised concerns about the high cost of borrowing and its impact on the continent’s economic growth and investment prospects.
Afreximbank’s Director of Regional Operations, Kudawashe Matereke, said African countries were paying more to access credit despite recording lower infrastructure loan default rates than several other emerging regions. Citing a Moody’s Analytics study, he said infrastructure loan defaults in Africa averaged above 1.9 per cent, compared with 4.6 per cent in Asia, 10 per cent in Latin America and 12.4 per cent in Eastern Europe. He added that reducing borrowing costs by two percentage points over three years across an $18.6 billion portfolio could save about $1.12 billion.
Beyond expensive credit, Matereke pointed to geopolitical conflicts, inflation, rising commodity prices and tighter global financial conditions as major pressures on African economies. He said Afreximbank had approved a $10 billion Gulf crisis response programme in March 2026 to support economies, financial institutions and businesses affected by dependence on imported fuel, food, liquefied natural gas and fertiliser. The programme includes foreign-exchange and liquidity support, alongside longer-term financing for energy, logistics and port projects.
Meanwhile, the International Finance Corporation (IFC) highlighted another major weakness in Africa’s economic structure: limited intra-African trade. IFC Division Director for West Africa, Olivier Buyoya, said only about 16 per cent of Africa’s exports were destined for other African countries at the end of 2025, compared with 67 per cent in Europe and 63 per cent in Asia. He said the African Continental Free Trade Area (AfCFTA) could give the continent the scale needed to attract more investment, strengthen regional value chains and create opportunities for businesses to expand beyond their home markets.
For Nigeria, Buyoya said deeper regional integration could be particularly significant because of the country’s large domestic market and growing presence in financial services, telecommunications, consumer goods and technology. He said stronger connections between African markets could help more Nigerian companies become regional champions while attracting international investors seeking access to the wider continent. With IFC providing an average of $4.1 billion annually in long- and short-term finance in Nigeria over the past four years, the broader message from the conference was clear: reducing the cost of capital and unlocking intra-African trade could be crucial to turning Africa’s economic potential into sustained growth.
source: The guardian
