A recent report by Fitch Solutions has revealed that Ghana, Nigeria, and Uganda are expected to face significant budget deficits in 2025, leading to a substantial increase in borrowing. This trend is set to persist in sub-Saharan Africa, with governments relying on domestic and foreign sources to cover their budget shortfalls.

The report highlights that Uganda, Nigeria, and Ghana will be the most affected, with budget deficits projected to be substantial in these countries. The quarterly average of SSA 10-year government bonds rates has increased to 12.63% in Q2 2024, surpassing the previous high of 12.62% in Q4 2022.

This increase in borrowing is attributed to various regional variables, including monetary tightening in Nigeria. The report also notes that despite high domestic and foreign yields, international capital markets are back in action.

The implications of this trend are significant for the tech and startup community, as it may impact the availability of funding and investment opportunities in these countries. Governments may need to rely more heavily on domestic sources of funding, which could lead to increased competition for startups and entrepreneurs seeking capital.