IMF Releases List of Least Indebted Countries in Africa, Nigeria Takes Position
- International Monetary Fund identified Nigeria as one of the least indebted countries in Africa
- Tanzania is at the top of the list with a 41.8% debt-to-GDP ratio, followed by Nigeria with a 41.3% ratio
- Nigeria's low debt load can be attributed to several factors, including its diverse economy and effective debt management strategies
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Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
International Monetary Fund has identified Nigeria as one of the least indebted countries in Africa.
Source: UGC
Tanzania is at the top of the list with a 41.8% debt-to-GDP ratio, followed by Nigeria with a 41.3% ratio
Nigeria's low debt load can be attributed to several factors, including its diverse economy and effective debt management strategies, according to a Tribune online report.
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Least indebted country
This list highlights the importance of indicators like the debt-to-GDP ratio for evaluating a country's financial health. Debt sustainability is a cause for concern when ratios are higher than zero.
An economy with a low debt-to-GDP ratio generates enough commodities and services to pay off debt without going into debt again. According to Wikipedia, a high debt-to-GDP ratio, on the other hand, is not desirable for a nation because it suggests a larger default risk.
Tanzania's leading position with a 41.8% debt-to-GDP ratio indicates its responsible debt management strategies.
Nigeria, whose external debt reached $41.59 billion, or N31.98 trillion, as of December 2023, closely trails after with a percentage of 41.3%, underscoring its significance in Africa's economic landscape.
Nigeria's numerous economic sectors and efficient debt management techniques are two reasons for its very low debt load.
The country has around N97.34 trillion in total debt, according to the Debt Management Office (DMO).
Nigeria's positive debt situation can be attributed to its responsible debt management, allowing it to preserve stability and boost investor confidence despite its significant economic importance on the continent.
Lenders face lower financial risks when lending to African nations with low debt loads, as these nations are better positioned to attract investment and extra help from both foreign and domestic creditors.
Nigeria's advantageous debt situation is further supported by its ranking higher than nations like Cameroon, Chad, Comoros, Equatorial Guinea, Guinea, Ethiopia, Botswana, and the Democratic Republic of the Congo.
The Top 10 least indebted is heightened as follows
- Tanzania - 41.8%
- Nigeria - 41.3%
- Cameroon - 39.6%
- Chad - 38.7%
- Comoros - 36.9%
- Equatorial Guinea - 33.7%
- Guinea - 31.5%
- Ethiopia - 31.2%
- Botswana - 18.1%
- DRC - 11.1%
DMO speaks on new debt
Legit.ng reported that Patience Oniha, Director General of the Debt Management Office (DMO), has said that the federal government has raised N4.5 trillion out of the N6 trillion domestic borrowing objective in the 2024 budget thus far.
Oniha made this statement in Lagos during an interactive session with primary federal government securities market dealers.
She mentioned that one of the critical sources of federal government spending is still domestic securities.
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Source: Legit.ng
