Nigeria Takes Position on List of African Countries With Highest Debt to IMF

Nigeria Takes Position on List of African Countries With Highest Debt to IMF

  • The IMF helps countries all around the world to arrest challenges of financial crises
  • By the end of 2022, sub-Saharan Africa's average debt ratio has nearly doubled
  • Egypt leads countries in Africa with the highest debt to the IMF, according to data journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The International Monetary Fund (IMF) has been referred to as the world's "financial crisis firefighter."

Member nations rely on it to handle their debilitating sovereign debt and prevent the financial system from worsening.

Nigeria Takes Position on List of Africa’s Country With Highest Debt to IMF
Recent data has shown that Nigeria is not in debt distress. Photo Credit: FG
Source: UGC

In most African nations, foreign debt is a significant funding source, supporting low savings rates, limited export revenue streams, and restricted tax bases.

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Countries primarily borrow money from outside sources to balance their consumption over time and enable more excellent investment now at the expense of less current consumption.

The expected future earnings on the investment are intended to offset the expenses of the external borrowing.

In just ten years, the average debt ratio in sub-Saharan Africa has nearly doubled, from 30% of GDP at the end of 2013 to almost 60% of GDP by the end of 2022. The repayment of this debt has likewise become much more expensive.

In Nigeria, the budget office disclosed that the federal government spent a whopping N5.65 trillion on debt service in 2022. This indicates that the country allocated N97 out of every N100 of its revenue to service its debts owed to the IMF in 2022.

Despite its N87 trillion debt, a recent report suggested that Nigeria is not in debt distress, although it raised concerns over the country's low revenue generation.

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IMF data has shown that countries like Egypt, Angola, and South Africa are top of the list of countries with the highest debt in Africa.

According to the IMF's official website, the top 10 African nations with the greatest debts to the organisation as of December 8, 2023, are shown below.

RankCountryDebt Amount
3.South Africa$2,669,800,000
4.Côte d'Ivoire$2,117,559,620
9.Democratic Republic of Congo$1,294,500,000

Nigeria successfully repays China, India, Germany $1.81bn, services CBN loans with N912bn reported that New Data from the Central Bank of Nigeria (CBN) has shown that the Nigerian government has allocated a significant $1.81 billion to service foreign debts during the first seven months of 2023.

An analysis of the amount shows that in January 2023, the Nigerian government set aside $112.35 million to service foreign debt.

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February saw a higher debt servicing of $288.5 million, while March witnessed a substantial expense of $400.5 million.


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