💸 East Africa’s Quiet Government Debt Climb (2013–2026) ⚖️

How a decade of government debt reshaped public finances across the region

In the early 2010s, public debt across East Africa looked manageable—uneven, yes, but largely contained. A decade later, the picture is markedly different. Government balance sheets have expanded, fiscal buffers have thinned, and debt has become a central constraint on policy across much of the region. Measured as a share of GDP, Africa’s average government debt rose from 33.8% in 2013 to a projected 63.5% by 2026, according to IMF World Economic Outlook data. East Africa mirrors this trajectory—but with sharper contrasts, reversals, and outliers that reveal how differently countries have navigated growth, shocks, and financing choices.

This is not a story of debt exploding everywhere at once. It is a story of accumulation, adjustment, and, in some cases, retrenchment.

Now let's map this...

A region that borrowed—and kept borrowing

Between 2013 and 2019, debt ratios across East Africa climbed steadily. Infrastructure drives, ambitious public investment programmes, and easier access to external financing pushed governments to borrow more, often faster than GDP expanded.

The shock of the pandemic in 2020 accelerated this trend. As revenues collapsed and spending needs rose, debt ratios jumped sharply across the board. Kenya’s debt leapt from 59.1% of GDP in 2019 to 68% in 2020. Rwanda’s rose even faster, from 53.6% to 68.7%. Uganda crossed the 45% mark for the first time.

By then, the region’s debt story had shifted—from development financing to fiscal survival.

Kenya and Rwanda: converging at the high end

By 2026, Kenya and Rwanda emerge as the most indebted economies in the region, with debt-to-GDP ratios projected at 70.1% and 74.8%, respectively. Kenya’s trajectory has been one of persistence rather than spikes. Debt rose almost every year from 2013 to 2023, peaking at 73.4% before modest consolidation efforts slowed—but did not reverse—the trend. The result is a country now operating with limited fiscal space, where debt servicing increasingly crowds out development spending.

Rwanda’s story is steeper. Its debt ratio has nearly tripled over 13 years, rising from 26.7% in 2013 to nearly 75% by 2026. Much of this borrowing financed growth-enhancing investments, but the pace of accumulation leaves Rwanda exposed to external shocks and refinancing risks. Both countries now sit well above the regional average—and far above where they started.

Ethiopia and Tanzania

Not all countries followed a straight upward path. Ethiopia’s debt peaked at 58.4% in 2018, before declining steadily to a projected 41.1% by 2026. Fiscal consolidation, debt restructuring efforts, and slower public investment helped bring ratios down, even amid economic and political strain.

Tanzania shows a similar but gentler arc. Debt rose gradually from 32.7% in 2013 to just under 50% by the mid-2020s. The increase is real—but controlled. By regional standards, Tanzania remains relatively moderate, balancing borrowing with steady GDP growth.

These cases show that debt trajectories are not destiny; policy choices matter.

The extremes: volatility and absence

Some stories are defined less by trend than by turbulence. South Sudan’s debt profile is a picture of volatility, swinging from 17.6% in 2013 to an extraordinary 178.3% in 2017, before collapsing and rising again. Conflict, oil dependence, and weak institutions make its debt figures less a measure of policy than of fragility.

Eritrea stands apart altogether. With debt exceeding 230% of GDP in 2013 and peaking near 290% in 2017, it was among the most indebted countries globally. The absence of recent data after 2019 leaves a gap—but not a comforting one.

One region, many fiscal realities

By 2026, most East African countries will carry debt ratios nearly double their 2013 levels. Yet the region is far from uniform:

• Some countries borrowed heavily and are now consolidating.

• Others borrowed steadily and remain stretched.

• A few face structural debt problems that data alone cannot explain.

  
  

What unites them is a narrower margin for error. With higher global interest rates and tighter financing conditions, debt is no longer just a legacy of past choices—it is a constraint on future ones.

East Africa’s debt story is not about collapse. It is about limits. And those limits are arriving faster than many expected.