African governments are rethinking how they pay for the services and investments their citizens depend on, and the shift is driven by a simple problem: borrowing in US dollars has become more expensive and more uncertain. That is the picture emerging from S&P Global Ratings, which says African sovereigns are increasingly stepping away from international Eurobond issuance and turning instead to their own domestic capital markets, along with funding from multilateral institutions.
For ordinary citizens, the cost of a government’s borrowing is never abstract. When external financing gets pricier, more of a national budget can be crowded out by debt service, leaving less room for the public services people rely on. The move toward domestic markets, described by S&P as a deliberate change of course, is framed by the ratings firm as a response to tighter global liquidity, geopolitical risks and lingering trade policy uncertainties that have raised the price of accessing dollar funding.
Samira Mensah, Managing Director of Research and Analytics Africa at S&P Global Ratings, told Forbes Africa that the shift was anticipated. “We have seen a shift, and that was also our expectation starting this year, from U.S. dollar funding to more reliance on domestic capital markets,” she said. Several sovereigns, she explained, have chosen their respective domestic markets rather than raising dollars through Eurobond issuance, while some have also undertaken total return swap (TRS) transactions with international banks.
The turn inward is paired with a broader effort to diversify funding sources. African governments are seeking financing from institutions such as the African Development Bank (AfDB), the Africa Finance Corporation (AFC) and the World Bank, as international market conditions become more challenging. For the public, that mix of funding channels matters because it can determine how resilient a country’s financing is when global conditions turn hostile, and how steady the flow of resources to national priorities remains.
Meanwhile, at least one government is framing fiscal credibility as a public commitment. Nigeria’s Finance Minister, Taiwo Oyedele, spoke of the country’s ambition to attain investment-grade sovereign status within three years in his opening keynote at the recent two-day S&P Global Africa Summit 2026, held in the commercial capital Lagos. The ambition follows S&P’s upgrade of Nigeria’s sovereign credit rating in May, to B from B-, with a stable outlook.
Mensah described the target as an important signal of the government’s commitment to economic progress. She also placed it in a wider continental context, noting it is far from unique: “It’s not the first country actually in Africa that has ambition to become investment grade.” The upgrade itself, she added, represents “one step in the right direction.”
Whether the goal can be met on the stated timeline is another question, and it is one on which ratings officials urge patience. Roberto Sifon-Arevalo, S&P Global Ratings’ Chief Analytical Officer for Sovereign and IPF Ratings, said the target is achievable but would require considerable time. “It takes a huge amount of time to own stability of policies and building a track record. But yeah, everything, you know, these things of course are attainable,” he told Forbes Africa.
Taken together, the two threads of the story point in the same direction. Governments across the continent are adjusting to a world in which dollar funding is harder and costlier to secure, leaning on domestic markets, multilateral lenders and improved credit standing to keep financing flowing. For citizens, the significance lies in what those choices protect: the stability of public financing, and with it, the continuity of the services and investments that depend on it. How quickly countries like Nigeria can convert ambition into a stronger rating remains to be seen, but the direction of travel, according to the analysts watching closest, is already clear.