Between 2007 and 2024, twenty-one sub-Saharan African countries issued sovereign Eurobonds for the first time. Total issuance exceeded $111 billion at face value. The bonds carried coupons of 5-10 per cent, were denominated in US dollars, and typically had 10-year bullet maturities. Five of these twenty-one issuers have since defaulted or restructured: Seychelles (2008), Mozambique (2016), Zambia (2020), Ethiopia (2023), and Ghana (2022).

This is not a story of bad luck. It is a story of structural vulnerability — where optimistic growth forecasts enabled market access, commercial creditors replaced concessional lenders, and bullet maturity structures concentrated repayment risk into narrow windows.

The over-borrowing cycle follows a consistent pattern. A major resource discovery or commodity price boom triggers upward forecast revisions. Credit rating agencies upgrade the sovereign. Investment banks pitch a debut Eurobond. The offering is massively oversubscribed — sometimes 5-8 times — which validates the narrative and opens the door to further issuance. The growth that justified the borrowing fails to materialise. Interest payments consume an increasing share of revenue. The country enters debt distress.

The note documents this cycle with data on all 21 SSA Eurobond issuers, tracking forecast errors at issuance vintage, coupon escalation across tranches, creditor composition shifts from concessional to commercial, and the interest burden trajectories that preceded each default.

The IMF Global Debt Database reveals a striking pattern: public debt levels rise sharply in the years immediately following giant petroleum discoveries — long before any revenue arrives. The chart below tracks central government debt as a share of GDP, aligned to discovery year. Among non-HIPC countries, the average debt accumulation is over 20 percentage points within a decade of discovery. Mozambique added 48 percentage points. Senegal added 30. Mongolia 32. Kenya 16. Ghana 14.

The evidence is stark across multiple dimensions. Forecast errors at the point of Eurobond issuance were large and systematic: Zambia's cumulative growth overestimate was 17.3 percentage points, Mozambique's 15.6 percentage points. Creditor composition shifted dramatically: the private share of SSA external debt rose from 22 per cent in 2006 to 42 per cent by 2023. Interest costs exploded: Ghana's interest payments consumed 47 per cent of government revenue at the point of default, up from 14 per cent at the time of its first Eurobond. And HIPC debt relief was systematically followed by commercial re-borrowing — Ghana was forgiven $6.5 billion, then borrowed $15.5 billion in Eurobonds at five times the interest rate.