Moody's raised its outlook for sub-Saharan African countries to positive on Wednesday, saying reforms had helped them weather inflationary pressures, while strong commodity prices and easier access to financing had improved their fiscal positions.

Moody's cautions that heavy debt repayment burdens, limited government income and risks from climate change and regional security threats remain major weak spots.

It expects the region's economies to grow 4.3% in both 2026 and 2027, measured as a weighted average across countries.

It forecasts the amount governments need to borrow each year, to cover deficits and repay maturing debt, will decline to 11.2% of GDP in 2027 from a peak of 12.3% in 2025.

Moody's predicts total government debt will level off at 56.6% of GDP in 2027, down from 62.4% in 2025.

It expects Zambia and Ethiopia to see the biggest drops in debt. Botswana, hit by weak diamond demand, and Gabon, which is struggling to rein in spending, will see the sharpest rises.

Kenya and Zambia will each spend about 35% of their government revenue just on interest payments in 2027, more than any other country in the region.

It warns a prolonged surge in inflation, severe weather events or a sudden investor pullback from the region's bond markets could darken the picture.

Only two of the 25 countries it rates in the region, Botswana and Mauritius, are investment grade, meaning it considers them relatively low-risk borrowers.

Of the 25, eight have positive outlooks — South Africa, Namibia, Angola, Nigeria, Togo, Ghana, Republic of Congo and Zambia — 13 are stable and four are negative: Mauritius, Gabon, Mali and Senegal.