Nigeria is responsible for eight percent of Africa’s external debt, making it one of the 10 African countries that collectively hold 69 per cent of the continent’s total external debt.
This is according to a report by Afreximbank Research.
The report released late February and titled, ‘African Debt Outlook: A Ray of Optimism’, highlights the challenges and opportunities facing African nations in managing their debt.
The Afreximbank Research report stated that in the first half of 2024, 10 African nations constituted 69 per cent of the continent’s total external debt stock, up from 67 per cent in 2023.
According to the report, while Nigeria accounts for eight percent of this debt, other countries leading in external debt are South Africa (14 per cent), Egypt (13 per cent), Morocco (six per cent), Mozambique (six per cent), Angola (five per cent), Kenya (four per cent), Ghana (four per cent), Côte d’Ivoire (three per cent), and Senegal (three per cent).
“Africa’s external debt levels remain elevated, primarily due to the limited development of domestic financial markets and high interest rates. The growing demand for foreign exchange to finance imports has further exacerbated external indebtedness, fuelled by reliance on aid, concessional loans from multilateral institutions, and competitive rates offered by private creditors.
“Since 2008, the external debt of African countries has escalated significantly, reaching approximately $1.16tn and representing 60 per cent of the region’s total public debt stock as of 2023. Projections indicate a slight increase to $1.17tn in 2024, with sustained growth anticipated, potentially reaching $1.29tn by 2028.
“This trend is driven by the continent’s increasing financing requirements, largely due to population growth pressures,” part of the report read.
(Business Mark)
