According to data from the International Monetary Fund, Equatorial Guinea, Botswana and Chad are the 3 least indebted African countries.
The list was compiled by the International Monetary Fund; external debt is expressed as a % of GDP:
Public debt has increased in at least 40 African countries over the past decade.
Consequently, some find themselves faced with a delicate situation combining high debt, increased needs for development spending in a context of budget deficit, and unfavorable constraints on exchange rates.
These questions have become more pressing since 2022, when persistently high inflation prompted the world’s major central banks to embark on the most aggressive monetary tightening campaign in decades.
Monetary policy tightens when central banks raise interest rates.
Since then, global interest rates have continued to rise, leading to increased repayments of external loans and increasing the debt burden accumulated over the past decade.
In addition, some countries with worsening debt situations have suffered significant exchange rate depreciations and have sought to stabilize the value of their national currencies.
Many indebted countries face three dilemmas that are not easy to resolve. Addressing one of these issues compromises the others.
It is possible to adopt measures to have greater room for maneuver to meet these challenges while facilitating difficult trade-offs.
These include prioritizing public spending measures that boost growth, solving the revenue collection problem facing all African countries, and restructuring unsustainable public debt.
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