Nigeria and Ghana are among the West African economies where debt-interest payments rival or exceed public health spending, highlighting the growing pressure debt servicing is placing on government resources, according to the African Development Bank (AfDB).

The AfDB disclosed this in its Regional Economic Outlook (REO) 2026 for West Africa, which examined the rising share of government revenue being committed to external debt service across the continent.

The report warned that rising debt-service costs are narrowing the fiscal space available for infrastructure, healthcare and other development priorities, with Nigeria and Ghana among the starkest cases in the region.

What the report is saying

The AfDB said debt service is absorbing an increasing share of public resources as governments face higher external debt-servicing costs.

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  • “Debt service is absorbing a rising share of public resources,” the AfDB stated.
  • “The crowding-out is starkest when set against social spending,” with 25 of 51 African countries with available data spending more on external-debt interest payments than on healthcare between 2021 and 2023.

The bank identified Nigeria and Ghana among the West African economies where interest payments rival or exceed public health expenditure as a share of GDP.

The AfDB said the trend illustrates how debt-service costs can displace development spending and makes revenue mobilisation and liability management increasingly important.

The report noted that the share of government revenue devoted to external debt service across Africa increased from 23.7% in 2017 to 31% in 2024.

  • The increase in debt-service pressure has been particularly pronounced across several West African economies, according to the AfDB.
  • Cabo Verde’s external debt service as a share of government revenue increased from 10.0% in the 2015-2019 average to 16.7% in the 2020-2023 average.
  • Benin recorded an increase from 7.7% to 16.5% over the same periods.

The AfDB said external debt service increased as a share of government revenue in most West African economies.

The bank also linked high public debt to weaker productivity, noting that a 1% increase in public debt is associated with declines of 4.9% in labour productivity and 4.6% in total factor productivity.

The AfDB said the relationship is partly explained by large interest bills crowding out public investment in infrastructure, social services and institutions, while heavy government borrowing can also increase private financing costs.

What you should know

Nigeria’s debt-service burden has remained significant, with both external and domestic obligations requiring substantial government resources in the first quarter of 2026.

The AfDB said the rising debt-service ratios across West Africa reinforce the need for borrowing to be matched by improvements in public investment efficiency, while stronger revenue mobilisation and effective liability management remain central to preserving fiscal space.