The African Development Bank (AfDB) has revealed that Nigeria and Ghana spend more on external debt interest payments than on public health, underscoring the severe fiscal constraints facing Africa's largest economies. The disclosure, made in the AfDB's latest economic report, highlights the growing burden of debt servicing and its impact on critical social sectors.
Debt Servicing Outpaces Health Budgets
According to the AfDB's 'African Economic Outlook 2026' report, Nigeria allocated approximately 82% of its government revenue to debt servicing in 2025, while Ghana's debt service-to-revenue ratio stood at 55%. In contrast, public health expenditure in both countries remains below 5% of GDP, a figure far short of the Abuja Declaration target of 15%.
The report notes that Nigeria's external debt interest payments alone consumed about 1.9% of GDP in 2025, exceeding the country's total public health budget of 1.5% of GDP. Similarly, Ghana's external debt interest payments reached 1.7% of GDP, surpassing its health spending of 1.3% of GDP.
Impact on Development and Social Welfare
This imbalance has dire consequences for human development. With limited funds for healthcare, both countries struggle to combat diseases, improve maternal and child health, and strengthen primary healthcare systems. The AfDB warns that continued debt distress could reverse gains made in poverty reduction and economic growth.
"The situation in Nigeria and Ghana is a stark reminder that debt sustainability is not just a macroeconomic issue but a moral one," said Dr. Akinwumi Adesina, President of the AfDB, in a statement accompanying the report. "When a nation spends more on interest payments than on the health of its citizens, it undermines the very foundation of development."
Call for Comprehensive Debt Restructuring
The AfDB urges international creditors and multilateral institutions to consider debt restructuring and relief measures for countries facing high debt service burdens. It also calls on governments to enhance domestic revenue mobilization and prioritize investments in human capital.
"We cannot achieve the Sustainable Development Goals if our resources are locked in debt servicing," the report reads. "African governments must renegotiate terms that free up fiscal space for health, education, and infrastructure."
Comparisons with Other African Nations
The report also highlights that several other African countries, including Zambia, Mozambique, and Chad, face similar challenges. However, the sheer size of Nigeria and Ghana's economies makes their situation particularly significant for regional stability and growth.
For Nigeria, the ratio of debt service to revenue was among the highest in Africa, driven by a combination of low revenue generation and rising borrowing costs. Ghana, which defaulted on parts of its external debt in 2022, continues to negotiate a restructuring program with the International Monetary Fund (IMF).
Path Forward
The AfDB recommends that Nigeria and Ghana implement fiscal consolidation measures, broaden the tax base, and curb corruption to reduce reliance on borrowing. It also encourages investment in productive sectors to stimulate economic growth, which would ultimately increase revenue and reduce debt ratios.
"The choice between paying creditors and investing in people is a false one," the report concludes. "With sound economic policies and international cooperation, these countries can achieve both debt sustainability and improved public health outcomes."
