Nigeria Ranks among 10 Least Indebted African Countries by IMF
The International Monetary Fund (IMF) said about 10 African countries still have manageable debts compared to their GDP.
The report ranks Nigeria among the countries in Africa with low debt compared to its GDP despite calls by Nigerians for the country to tame its appetite for borrowing.
Nigeria’s current debt profile recently hit N87 trillion, with the federal government saying it will convert CBN’s Ways and Means Advances to loans.
The report follows a statement by ex-president Olusegun Obasanjo saying that African countries face challenges in obtaining debt relief due to mismanagement of resources.
The Nigerian elder statesman stressed the need for careful leadership, warning against debt trap, and encouraging qualities such as setting examples and decision-making for effective leadership.
BusinessDay reports that the debt-to-GDP is a critical metric that compares a country’s total debt to its economic output. Lower ratios show financial stability and higher ratios indicate potential challenges in fulfilling debt obligations, which attract global investors, and interest rates on government bonds.
The IMF listed the top 10 African countries with the least debts going into 2024. They are:
Tanzania: 41.8% debt-to-GDP ratio
Tanzania leads among Africa’s least indebted countries with a 41.7% debt-to-GPD ratio. The country’s relatively low ratio shows a balanced monetary approach, contributing to its economic stability.
Nigeria: 41.3% debt-to-GDP ratio
Nigeria is surprisingly ranked second on the list of least indebted countries on the continent despite cries about its bloated debt servicing. The country has about 41.3% debt to GDP, and its diverse economic sectors and efforts to manage its debts contribute to its position among the least indebted nations.
Cameroon: 39.6% debt-to-GDP ratio
The Central African country’s debt-to-GPD of 39.6% demonstrates Cameroon’s commitment to keeping a fiscal discipline. The country has maintained strict control over government expenditures and prudent handling of oil revenue, critical resources, and others, which have aided its budgetary stability.
Chad: 38.7% debt-to-GDP ratio
Chad reflects a balanced approach to managing financial obligations with its 38.7% debt-to-GDP after emerging from years of internal war. The country’s debt restructuring initiatives and transparency have been critical in keeping its debt profile low.
Comoros: 36.9% debt-to-GDP ratio
The country shows prudent fiscal discipline with a debt-to-GDP ratio of 36.9%, an example of a nation’s debt management.
Equatorial Guinea: 33.7% debt-to-GDP ratio
The country’s debt-to-GDP ratio stands at 33.7%, indicating its strategic approach to financial policies. Its vast oil wealth could lead to overspending, but it has kept resources under strict control along with non-oil sectors like agriculture and tourism.
Guinea: 31.5% debt-to-GDP ratio
Guinea’s debt-to-GDP ratio of 31.5% reflects the West African nation’s efforts in maintaining fiscal responsibility. Emerging from years of political instability, Guinea is focused on responsible resource management. Diversifying its economy beyond mining, coupled with prudent budgeting, has paved the way for fiscal stability.
Ethiopia: 31.2% debt-to-GDP ratio
Ethiopia’s debt-to-GDP ratio of 31.2% highlights the East African nation’s resilience in managing financial obligations. Large-scale infrastructure projects and investments in education and healthcare are driving growth while keeping debt under control.
Botswana: 18.1% debt-to-GDP ratio
Botswana stands out with a meagre debt-to-GDP ratio of 18.1%, showcasing the Southern African nation’s prudent economic management. Botswana sets the gold standard for debt management. Careful planning, robust institutions, and a focus on long-term development have made it Africa’s second-least-indebted country.
DRC: 11.1% debt-to-GDP ratio
The Democratic Republic of the Congo boasts the lowest debt-to-GDP ratio among Africa’s least indebted countries, at 11.1%. The nation’s vast natural resources and efforts in managing debt contribute to its economic stability.
Nigeria’s debt to hit a new record Legit.ng reported that the official data on Nigeria’s public debt profile revealed a notable surge, surpassing an eightfold increase in the last ten years. The substantial growth became evident considering the inclusion of the central bank loan recently authorised by President Bola Tinubu.
Legit.ng recently reported that the Senate approved Tinubu’s proposal to securitise the outstanding N7.3 trillion Ways and Means.
