Africa's next big deal is with its own savings and budgets

Most attention in New York went to money from abroad. Yet a large share of Africa's debt is owed at home, and a large pool of savings sits in African pension funds. Governments can change how both are used without waiting for foreign lenders.

The reasoning

Debt now shapes every other choice a government makes. In 2010, eight African countries paid more than 10% of their revenue in interest. By 2024 the number was 27. In Kenya, interest took 24.3% of government revenue in 2023. Across sub-Saharan Africa, paying debts costs 3.6 times what governments spend on education. Some 62% of those payments go to lenders at home, mostly banks and pension funds that hold government bonds. Money that could pay teachers is going to interest instead.

African pension and insurance funds hold about $775 billion. The pool is uneven. Pension assets equal 96% of the size of the economy in South Africa and 104% in Namibia, against 8% in Nigeria and 6% in Ghana. In Ghana, 85% of pension money sits in government bills and bonds. Investment rules already allow these funds to put more into private companies and projects at home, and trustees rarely use that room. Development banks and foundations could agree to take the first losses on such investments. That would let trustees use the limits they already have, with less risk to savers.

Because so much of the debt is owed at home, African governments can act without waiting for foreign creditors. When they agree new terms with local lenders, they can tie that relief to a minimum level of spending on education. They can also give trustees legal protection, so that savings can be invested at home safely. Both steps are decisions for national parliaments and finance ministries, and neither needs a new global agreement.

The evidence

• African Arguments: African pension and insurance funds hold about $775 billion and are already allowed to invest more at home Source (opens in a new tab)
• Ecofin, reporting UNESCO: debt payments are 3.6 times education spending across sub-Saharan Africa Source (opens in a new tab)
• UN Trade and Development (UNCTAD): 27 African countries paid more than 10% of revenue in interest in 2024, up from 8 in 2010 Source (opens in a new tab)
• World Bank: interest as a share of Kenya's government revenue Source (opens in a new tab)
• OECD: pension assets as a share of the economy in South Africa, Namibia, Nigeria and Ghana Source (opens in a new tab)