WASHINGTON—One month of war in Iran has added nearly $4.4 billion to Africa’s annual debt burden, enough to build a gigawatt of solar power or 400 kilometers (250 miles) of railway. Yet, as is often the case, this hit to Africa’s finances is not due to new borrowing but rather to the rising cost of capital. With $149 billion in African Eurobonds outstanding, the combined effect of climbing US Treasury benchmarks and widening risk premiums has been to drain between $900 million and $1.2 billion annually from budgets already stretched to the breaking point.

© Project Syndicate