The International Monetary Fund has published an F&D magazine article examining the rapid shift in sub-Saharan Africa from external borrowing toward domestic debt, noting that most public debt in the region is now domestic. The piece sets out how the transition can reduce exposure to exchange-rate swings and tightening global financial conditions, while creating new rollover, cost, and financial-stability vulnerabilities if domestic debt market development is not accompanied by stronger policy and institutional frameworks. The article highlights that reliance on Eurobonds increased foreign-currency and investor-sentiment risk, and that no sub-Saharan African country issued Eurobonds between spring 2022 and January 2024. It argues that deeper domestic markets can support monetary policy operations and yield-curve formation, but warns that domestic debt often has much shorter maturities, raising refinancing risk; Ghana, after its 2023 domestic debt restructuring, issued only Treasury bills under one year with an average outstanding maturity of less than three months as of November 30, 2025. Costs can also be higher, with the median domestic issuance rate cited at 8.8 percent in 2024, while high bank holdings of sovereign paper can crowd out private credit and intensify the sovereign-bank nexus, described as growing fastest in sub-Saharan Africa and driven primarily by low-income countries. Expanding the investor base, including through nonresident participation, could lower yields and improve liquidity but may introduce volatile “hot money” flows; the authors also stress transparency in debt statistics, stronger legal and regulatory frameworks, prudent debt-portfolio strategies, and broader macroeconomic stability to manage the trade-offs.

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