Despite being commonly perceived as heavily indebted, Nigeria has been ranked as the second least indebted African country by the International Monetary Fund (IMF).
This ranking emphasizes the significance of metrics such as the debt-to-GDP ratio in assessing a nation’s financial health. Lower ratios indicate stability, while higher ratios raise concerns about debt sustainability.
Tanzania’s top position with a debt-to-GDP ratio of 41.8% showcases its prudent debt management practices. Nigeria closely follows with the ratio of 41.3%, highlighting its importance in Africa’s economic landscape, despite its external debt reaching $41.59 billion or N31.98 trillion as of December 2023.
Nigeria’s relatively low debt burden can be attributed to various factors, including its diverse economic sectors and effective debt management strategies.
According to the Debt Management Office (DMO), Nigeria’s total debt burden stands at about N97.34 trillion.
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By responsibly managing its debts, Nigeria has maintained stability and enhanced investor confidence, contributing to its favorable debt position despite its significant role in the continent’s economy.
African countries with minimal debt obligations are better positioned to attract investment and receive additional support from both international and local creditors, presenting fewer economic risks to lenders.
Nigeria’s ranking above countries like Cameroon, Chad, Comoros, Equatorial Guinea, Guinea, Ethiopia, Botswana, and the Democratic Republic of Congo further solidifies its favorable debt position.
