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12 African Countries With The Highest Debt Levels

12 African Countries With The Highest Debt Levels

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African governments have relied heavily on international funding in recent years to undertake development in their countries. This has led to high debt levels by several countries on the continent, to both bilateral and multilateral creditors.

The World Bank and International Monetary Fund (IMF) launched a programme in 1996 to provide debt relief to the most indebted nations in the world. In its 20 years of existence, the programme has helped 36 of the world’s most indebted countries, with 30 being African nations.

Here are some of Africa’s most indebted nations;

Sources; Africa Ranking, Daily Nation, Daily Monitor, Zimbabwe Independent, TesfaNews, FREEDOM NEWSPAPER, Statista.com, Sunday Times, International Business Times UK, JOY Online,Kinnaka’s Blog, ENCA, Chatham House, CameroonWeb, Nigeria News

Wikipedia.org
Wikipedia.org

Eritrea

It is the most indebted nation in Sub-Saharan Africa. Its debt represents 126 percent of its Gross Domestic Product, valued at $5.35 billion in 2016. Eritrea is also one of the poorest nations in the world and has struggled financially since it got independence from Ethiopia in 1993.

Cape Verde Flag

Cape Verde

It is an archipelago of nine islands, off the West African coast. Cape Verde is one of Africa’s model democracies, with peaceful transitions in power since independence in 1975. The island’s debt is 122 percent of its GDP which is worth $1.98 billion. As part of mitigating the high debt-levels, the government slowed down on its Public Investment Programme.

Gambian President Yahya Jammeh  TheCitizenNG.com
Gambian President Yahya Jammeh (Image: TheCitizenNG.com)

Gambia

It is the third most indebted country in Sub Saharan Africa. The West African nation’s debt is 97 percent of its Gross Domestic Product (GDP). In 2015, Gambia was placed under a Staff-Monitored Program due to its alarmingly growing debt level. The IMF released $10 million to help mitigate the deficit. The nation’s debt became unsustainable in 2014 when it devoted 23 percent of its revenue to paying debts.

President Paul Biya Photo: Cameroon Tribune
President Paul Biya Photo: Cameroon Tribune

Cameroun

It is the most indebted country in French-speaking West Africa. Cameroun has an external debt of $5.3 billion. In 2016, the IMF cautioned the nation against spending more than its economy can support. Its external public debt rate is more than 8 percent. A huge proportion of the money used to fund big development projects has been borrowed in the form of soft loans from international creditors.

Chinese President Xi Jinping (R) meets with Mozambican President Filipe Nyusi in Johannesburg, South Africa, Dec. 3, 2015. (Xinhua/Li Tao)
Chinese President Xi Jinping (R) meets with Mozambican President Filipe Nyusi in Johannesburg, South Africa, Dec. 3, 2015. (Xinhua/Li Tao)

Mozambique

It is found in Southern Africa. Mozambique has been struggling to offset huge loans that were guaranteed by former President Armando Guebuza’s government. The nation has a debt of over $4.9 billion. Much of the borrowing was made between 2013 and 2014. The IMF has also increased the risk profile for lending to the Southern Africa nation after it was discovered early this year that it had not declared some of its debt.

wikipedia
wikipedia

Zimbabwe

It is a Southern Africa nation that has experienced financial crisis with high inflation levels. Zimbabwe had an external debt of about $7 billion by the end of 2015. At least $1.86 billion is owed to international creditors.They include World Bank ($1.15 billion), African Development Bank ($601 million) and $110 million to IMF. The nation’s is still struggling to rise from an economic recession that lasted for about a decade, up to 2008.

Canon trains Ghanaians to print
Photo: ghanabusinessnews.com

Ghana

It is one of most stable democracies in Africa. Ghana has however faced economic hardships in recent years. In December 2015, its total debt was $25.6 billion.The debt was 72.9 percent of the nation’s Gross Domestic Product. The debt has been on an increase since 2009.

businessdailyafrica.com
businessdailyafrica.com

Kenya

It is the biggest economy in East Africa. At the beginning of the 2015-16 financial year, Kenya had a debt of $3.2 billion. More than 60 percent of the debt was domestic. A huge proportion of the external debt was is owed to China, which is the country’s leading external financier. It has set aside $4.7 billion of its 2016-17 budget to pay its public debt. The IMF warned Kenya against her increasing debt in 2016.

redpepper.co.ug
redpepper.co.ug

Uganda

It is the second-biggest economy in the East African region, after Kenya. In 2015, its debt was $4.1 billion.  Uganda is among the world’s most indebted nations, largely due to her questionable capacity to pay the debt. It was projected to rise by $1.4 billion in the 2015-16 financial year, further worsening the cost of living and increasing the tax burden on the citizens. At least 88.2 percent of the total debt is owed to multilateral creditors, with World Bank being the single biggest creditor to the East African nation. Much of the borrowing has been necessitated by the nation’s low tax revenues.

Thinkstock
Thinkstock

Ethiopia

It is one of the fastest growing economies in Sub-Sharan Africa at a rate of about 10 percent. The nation has a debt of more than $12 billion, excluding $3billion and $300 million, borrowed from China and Exim Bank respectively. Much of the debt is owed to IMF, World Bank and African Development Fund. The rest is owed to bilateral creditors like India, Kuwait and China.

Image: biyokulule.com
Image: biyokulule.com

Chad

It is a West African nation. Chad is the fourth-least developed nation in the world, and more than 50 percent of her population (11.8 million) live in poverty. In 2013, it had $2.2 billion in debt owed to foreign lenders. The International Monetary Fund and World Bank set aside $1.1 billion in debt relief to the country. It became the first nation since 2012 to receive the relief under the Heavily Indebted Poor Country Initiative (HIPC) and Multilateral Debt Relief Initiative (MDRI).

Photo:  www.faceofmalawi.com
Photo: www.faceofmalawi.com

Malawi

It is one of the poorest countries in Southern Africa. In 2015, Malawi had a debt of $4.8 billion, an increase of $542 million from 2014. This was 83.4 percent of the Gross Domestic Product, worth US$5 billion.