IMF Expects Africa's Financing Needs to Surge after Loans Exceed $69 Bln

Africa’s reliance on the International Monetary Fund (IMF) is set to deepen as mounting debt pressures and limited alternatives leave governments across the continent with few affordable options, the Fund said this week.

Since 2020, the IMF has extended nearly $69 billion in financing to African nations, a figure expected to rise as more countries seek new programs, extensions, or top-ups to existing arrangements. A Fund spokesperson told Bloomberg via email that “demand from African countries for IMF support remains strong due to ongoing shocks and rising debt pressures.”

The IMF is currently engaged in programs at various stages with around 20 African countries, including Egypt, Benin, and Ghana. Others, such as Malawi, Kenya, and Mozambique, which had previously exited IMF programs after struggling to meet fiscal targets, are now re-entering talks. Uganda and Senegal are pushing for fresh programs, while Zambia is negotiating a one-year extension.

Despite persistent opposition to austerity-linked measures, from fuel subsidy protests in Angola this July to tax-hike demonstrations in Kenya last year, analysts say African governments increasingly view the IMF as an indispensable partner.

“Many leaders see the Fund as vital for shoring up foreign currency liquidity and securing concessional financing during debt and fiscal crises,” said Zainab Hussein, senior Africa analyst at consultancy Pangea-Risk. She added that reforms improving African representation on the IMF’s executive board have helped bolster the institution’s legitimacy across the continent.

The United Nations estimates that Africa’s external debt has soared above $650 billion, with debt-servicing costs jumping to $90 billion in 2024 alone. Economists warn the burden is crowding out private-sector investment and forcing governments to lean heavily on domestic capital markets, further straining local economies.

“Even though global liquidity is improving, many African countries remain saddled with expensive debt,” said Jacques Nel, head of Africa macroeconomic research at Oxford Economics. “This is pushing up risk premiums demanded by foreign investors.”

For African leaders, IMF involvement is increasingly seen not only as a financing tool but also as a strategic lever to access broader funding opportunities.

Hussein noted that IMF programs often provide a “financial anchor” and an “economic monitoring framework” that reassures creditors, making debt restructuring or additional borrowing more feasible. Such assurances are particularly crucial for countries negotiating lengthy debt overhauls or attempting to regain access to international capital markets.

While critics continue to warn that IMF-backed austerity measures risk fueling social unrest, analysts argue that the Fund’s oversight remains a stabilizing force for countries navigating a precarious mix of debt distress, high borrowing costs, and limited fiscal space.

As Africa’s external debt climbs and service costs surge, the IMF’s role as lender of last resort, and gatekeeper of investor confidence, looks set to become even more entrenched in the continent’s financial future.