Iran war fallout fails to halt African debt issuances
Citibank says it has helped governments raise a combined $6.2bn in debt this year - about 70% more than the same period in 2025.
African governments are persevering in their efforts to issue debt on international capital markets, despite concerns that the conflict in Iran might deter investors. Citibank's executive reported a more than two-thirds surge in African sovereign bond deals handled by the bank in 2026, with a combined $6.2bn raised – roughly 70% higher than the same period in 2025.
Leo Morawiecki, an emerging market debt investment specialist at Aberdeen Investments, asserts that the economic fallout from the Iran war has not been as dire for Africa as initially anticipated. He observes that while there has been a rise in food and energy prices, it has not triggered a significant inflation surge across other sectors.
Morawiecki points out that oil prices at $80 a barrel are acceptable for most African nations, which are also net oil exporters. "Market access remains accessible," he remarks. Recent examples include Angola issuing a bond earlier in the year, as well as the Democratic Republic of Congo and Republic of Congo. Morawiecki attributes this to the fact that the present external shock is less severe than post-Covid and the Russia-Ukraine war, which induced significant spikes in energy and food prices.
He further notes that the fundamental position of many issuers has improved, prompting the market to recognize this, hence maintaining market access. Foreign exchange reserves in several Sub-Saharan African countries are on the rise, with Ghana, Angola, Ivory Coast, and the DRC posting small current account deficits or surplus. They are moving towards IMF programs to clear arrears, a development that the market has found encouraging.
Morawiecki also highlights an increase in private placements on the continent, where governments sell bonds directly to a limited group of institutional investors, bypassing the public market. This method, albeit at a premium, allows for quicker fund raising with less market scrutiny. In May, the Republic of Congo raised $850m through a private placement to refinance domestic debt, a move that followed a similar $700m raise in February.
In December, Angola raised a yen-denominated private placement via Japan's "samurai market," while Gabon and Cameroon have also resorted to this approach. Morawiecki attributes this to the strong economic performance of African economies during global instability and the favorable conditions on international bond markets. "Spreads are very tight across the bond world – there are not many places where you can get double-digit yields," he explains, suggesting more interest in markets where such yields were not previously available. This includes Gabon, Cameroon, and the DRC, which attracted less scrutiny a couple of years ago.
Written by urgent.news from Africa Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
