Like other professions, economists use many abbreviations. One of the most common is the GDP, which represents the gross domestic product. According to the International Monetary Fund, the term has been widely used as a reference point for the health of national and global economies.
The gross domestic product (GDP) comprehensively measures the monetary value of all the products and services produced in a country in a given period.
Therefore, by comparing the ratio of a country’s government debt to its GDP, decision makers and multilateral lenders can gain reliable insight / understanding of the country’s capacity to repay its debts.
“By comparing what a country owes with what it produces, the debt-to-GDP ratio reliably demonstrates the ability of that particular country to repay its debts. Often expressed as a percentage, this ratio can also be interpreted are considered as the number of years required for debt repayment when GDP is fully devoted to debt repayment, “says Investopedia.
Discussions about the debt-to-GDP ratio of African countries have become important when one considers the fact that public debt across the continent has risen to levels never seen before in the history of modernity.
A recent report by the World Bank has shown that more than half of the world’s low – income countries, most of whom are in Africa, are either currently struggling with debt or risk doing so.
Standard Bank Group also recently raised red flags in Ghana, Kenya, Ethiopia, Zambia and Angola as African countries, which will soon face serious debt risks.
Below are 20 African countries with the highest debt-to-GDP ratios. This list is driven by a report by Statista from December 2021. Although the exact figures of the public debt of these countries have not been published, the percentage of debt to GDP is clearly indicated as you can see below.
1. Eritrea: Central government debt in this part of Africa is 175.1% of GDP.
Cape Verde: This island nation has a debt-to-GDP ratio of 160.7%.
3. Mozambique: Mozambique has a debt-to-GDP ratio of 133.6%.
4. Angola: The South African country has a debt-to-GDP ratio of 103.7%.
5. Mauritius: The gross debt of this island nation is 101% of GDP.
6. Zambia: Zambia’s gross national debt is also at 101% of its GDP.
7. Republic of the Congo: This country in Central Africa has a debt-to-GDP ratio of 85.4%.
8. Ghana: Ghana’s debt to GDP ratio is currently at 83.5%.
9. Gambia: In this country, the debt-to-GDP ratio stands at 82.3%.
Seychelles: This island country has a debt-to-GDP ratio of 81.9%.
Guinea-Bissau: In this country, the debt-to-GDP ratio is currently 79.1%.
12. Rwanda: Rwanda’s debt to GDP ratio stands at 74.8%.
13. Burundi: The East African country has a debt-to-GDP ratio of 72.4%.
Gabon: In Gabon, the debt-to-GDP ratio is 72.1%.
15. Senegal: This francophone West African country has a debt-to-GDP ratio of 71.9%.
16. Sierra Leone: The English-speaking West African country has a debt-to-GDP ratio of 71.1%.
17. Namibia: This country has a debt-to-GDP ratio of 69.9%.
18. Kenya: Kenya’s debt-to-GDP ratio is 69.7%.
19. South Africa: This country has a debt-to-GDP ratio of 68.8%.
20. South Sudan: South Sudan has a debt-to-GDP ratio of 64.4%.
The IMF added in an article on its website, not all productive activity is included in GDP. For example, unpaid work (such as that done in-house or by volunteers) and black market activities are not included because they are difficult to measure and accurately estimate.
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