Nigeria Among Top 20 African Countries With Highest Interest Rates
- African countries are reeling from debt burdens which have caused most of them to hike interest rates in their respective countries
- There are reports of debt distress on the continent and most countries are on the verge of default
- Countries in Africa have some of the highest interest rates in the world and this, according to financial experts may discourage borrowing
On June 14 through 15, the United States Federal Open Market Committee (FMOC) raised the country's interest rates by 75 basis points to stand between 1.50 to 1.75 per cent, the first increase since 1990.
African countries, including Nigeria, are battling a debt crisis that experts believe might lead to debt distress in the immediate future.
Source: UGC
Nigeria and the rest of Africa
Last week the Central Bank of Nigeria (CBN) increased its interest rates to 14 per cent, which many experts say is the highest in over a decade.
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A recent report by the International Monetary Fund (IMF) states that public debt ratios across Africa have spiked to a 20-year high as countries on the continent pile up debts which they incurred to finance critical infrastructure in their respective countries.
Business Insider reports that these countries are struggling to repay the loans while many are already exposed to debt distress.
Recently the West African country of Ghana went back on its words and approached the IMF for a loan, thereby lending credence to the fiscal crisis report facing the countries on the African continent.
The financial crisis in many African countries has been worsened by the war in Ukraine which has caused a major spike in commodities and energy costs and food inflation.
Focus on Africa's fiscal crises
A few months ago, some central banks in Africa were told to increase their benchmark lending rates because of some macroeconomic issues. Analysts have said many countries in Africa will yet hike their interest rates.
Lending or interest rates are how much commercial banks charge borrowers on the amount or the principal sum borrowed.
What is a lending interest rate?
Interest rates are usually set by respective countries’ central banks. The higher the rates, the more expensive the loans and this tend to discourage borrowing.
Top 20 African countries with the highest lending interest rates,
- Zimbabwe: 45.5%
- Madagascar: 43.3%
- Malawi: 24.2%
- Democratic Republic of Congo: 23.1%
- Uganda: 19.8%
- The Gambia:19.5%
- Angola: 19.4%
- Sao Tome $ Principe: 19.1%
- Sierra Leone: 18.9%
- Mozambique:18.2%
- Ghana: 17%
- Mauritania: 17%
- Tanzania: 16.7%
- Rwanda: 16.2%
- South Sudan: 16.1%
- Nigeria: 14%
- Liberia: 13.3%
- Guinea: 12.9%
- Burundi: 12.6%
- Kenya: 12.2%
The list of African countries with highest debt to China, amount and what the debts are used for
Legit.ng reported that Macau is the only country in the world that is debt-free, according to the International Monetary Fund (IMF).
The world’s greatest economies rank among the 20 countries with the highest external debts.
They are the US, Russia, United Kingdom, France, Germany, Japan and China, according to a Daily Trust report.
Source: Legit.ng
