As most African countries’ public debts stocks continue to steadily rise, many have shown concerns about the debt crisis which shares similarities to the situation in the early 2000s.
Several African countries, through a succession of excessive borrowing in the early 2000s, had gotten into considerable debt. Repayments began to retard growth causing governmental bodies to be unable to provide necessary services to their citizens.
As most African countries public debts stocks increased, calls for debt relief became louder, multilateral finance institutions extensively involved in African loans, such as the International Monetary Fund (IMF), the World Bank, and the African Development Bank, put together a plan to relieve some of the burdens.
However, by late 2017, Africa’s average public debt had increased to 57% of gross domestic product (GDP), nearly doubling in just five years. Interest payments on debt have risen from 4% to 11% of government revenues, reaching levels not seen since the “relief plan” began.
Additionally, the COVID-19 pandemic has been a triggering factor for an unprecedented financial crisis and a range of socioeconomic effects. In 2020, sub-Saharan Africa’s economy dropped by an estimate of 1.9%. This contraction caused the public finances to decline drastically.
According to IMF forecasts, government net lending and borrowing in Eastern and Southern Africa (ESA) will worsen from -4.3% of GDP to -5.7%.
Here are 5 African countries with the highest public debts stocks
The Republic of Chad is a country in North-Central Africa with a population of 16.43 million as of 2020.
According to Statista, Chad’s national debt from 2016 to 2020, with forecasts all the way to 2026 is estimated to be around $5.15 billion.
Due to the worsening debt conditions in the country, the IMF said on Tuesday that public and private creditors must complete a debt restructuring plan with Chad by the end of March in order to restore sustainable growth in the African country.
According to IMF mission leader Edward Gemayel, Chad’s real GDP is expected to fall by 1.1% in 2021, due to a reduction in oil production, but average annual inflation was contained after rising to 4.5% in 2020.
“The pandemic will likely leave long-lasting scars, and the Chadian economy is projected to remain weak over the near term, before gradually rebounding in 2024, to 3.6% provided adequate reforms are implemented”, Gemayel said.
The largest economy in Africa Nigeria has a population of 206.1 million as of 2020.
By the third of July 1 and September 30, 2021, Nigeria public debt was at $79.5 billion. According to the Debt Management Office (DMO), The rise in public debt in Q3 2021 is a result to the issuance of euro bonds.
The government’s $4 million Eurobonds accounted for the majority of the rise in September 2021.
The United Republic of Tanzania according to Statista has an estimated national debt of 39.15% in GDP. This also amounts to around $25.23 billion. This figure refers to the whole country and includes the debts of the state, the communities, the municipalities and the social insurance.
Uganda’s central bank stated that provisional data shows the country’s public debts were 66.1 trillion shillings which is $18.9 billion, up 15.1% from June 2020.
In its report on the state of the economy, the Bank of Uganda attributed the increase to a 33.6% in domestic loans.
The Summary of Economic and Financial Data has revealed that Ghana public debt amounts to $31.14 billion at the end of September 2021.
Ghana’s GDP equates to 77.8%, confirming concerns of analysts and economists that the country’s debt has reached catastrophic levels.
Between July and September 2021 to over $14 million (¢5.9 billion) additional debt was incurred.