African governments will lean more on multilateral lenders and reform momentum in 2026 even as debt distress risks remain elevated across the continent, S&P Global Ratings' head of national ratings and analytics for Africa Samira Mensah said on Monday.

"We have so far, according to the IMF, more than 20 countries facing a high risk of debt distress, or severe vulnerabilities," she said.

She added that resilience to external shocks is important because Eurobond borrowing typically comes in dollars. Bond issuance in sub-Saharan Africa has seen its strongest ever start to a year with lower borrowing costs driving about $6-billion of sales from the likes of Benin, Kenya and Ivory Coast. More is in store including a maiden sale by the Democratic Republic of Congo.

The ratings agency said seven of its sovereign upgrades in Africa last year were driven mainly by improving growth prospects and reform momentum, but it also took negative actions where shocks and policy setbacks made credit metrics worse. 

In a report released last week, S&P said outlook changes were "slightly tilted to the negative," driven largely by Senegal, Mozambique and Madagascar. Positives included South Africa. Mensah highlighted Nigeria as a reform story.

South Africa is rated BB with a positive outlook, Nigeria is B- positive, Mozambique is at CCC+ with a negative outlook while Senegal is at CCC+ "credit watch developing" reflecting concerns that it may potentially default.

"Nigeria is turning a corner," she said, even as the country continues to grapple with heavy debt-service costs. 

Mensah said in the future, nations may increasingly change how they raise funds as they try to reduce their reliance on volatile Eurobond windows.

"African sovereigns are looking more and more for the support of multilateral development banks," she said, arguing that highly rated multilaterals can mobilise capital at more attractive yields and then lend it to sovereigns on the continent.

S&P also flagged a potential boost to multilateral capacity.

It said recent changes to its criteria for rating multilateral lending institutions could reduce the capital intensity of lending to some lower-rated sovereigns with strong repayment track records. This could potentially allow for $600-billion to $800-billion in new sovereign loans globally, or, based on a simple pro-rata assumption, $90-billion to $120-billion more for Africa. 

Even so, governments will still test markets where they can. S&P estimated the average cost of funding for African sovereign issuance fell by about 100 basis points from 2024 to 2025 to 7.7%, though it said the cheaper average masked a selective market where some borrowers still face elevated costs.