The relationship between African nations and the International Monetary Fund (IMF) has garnered increasing attention, particularly as some countries grapple with soaring debt levels.
Several African nations find themselves at the forefront of this financial narrative, burdened by significant debts to the IMF.
In this article, WoK explores African countries with the highest debt to the IMF, shedding light on the factors contributing to their financial challenges.
1. Egypt – $10,050,183,347
Egypt’s relationship IMF has been characterized by significant borrowing, with current debt levels reaching over $10 billion, making it the most indebted country in Africa and the second globally after Argentina.
Following economic turmoil post-2011 revolution, Egypt entered into multiple IMF agreements, including a notable $12 billion deal in 2016 and a recent $3 billion arrangement in 2023 aimed at stabilizing its economy amid rising inflation and external shocks from global events like the COVID-19 pandemic and the Ukraine conflict.
However, the government has struggled to meet IMF conditions, raising concerns about its ability to manage this debt sustainably.
2. Angola – $2,989,900,003
Angola owes approximately $2.9 billion to the IMF, making it one of the most indebted countries on the continent.
The nation has faced a series of economic shocks, particularly due to its heavy reliance on oil, which constitutes a substantial portion of its GDP.
In recent assessments, the IMF noted that Angola’s public debt-to-GDP ratio rose to around 84% in 2023, driven by a weakening economy and the end of a debt moratorium.
3. Kenya – $2,566,263,300
Kenya’s relationship with IMF has been marked by significant debt levels, currently estimated at approximately $2.5 billion.
This debt arises from multiple credit facilities, including the Extended Fund Facility (EFF) and Extended Credit Facility (ECF), aimed at stabilizing the economy amidst rising fiscal pressures and a cost-of-living crisis.
The IMF’s support has been conditional on implementing stringent fiscal measures, which have sparked public protests and political backlash against the government.
4. Ghana – $2,275,210,000
Ghana faces a significant financing gap of approximately $2.2 billion, necessitating a new arrangement with the IMF, marking its 17th engagement since independence in 1957.
The country’s debt has surged to unsustainable levels, driven by high public spending and low revenue generation, resulting in a public debt-to-GDP ratio of about 79% by the end of 2020.
Despite efforts to stabilize the economy through IMF support, including a recent debt restructuring initiative, challenges such as inflation and currency depreciation continue to strain Ghana’s fiscal health.
5. Ivory Coast – $2,246,318,672
Ivory Coast’s debt stands at approximately 58% of GDP, a notable increase from 38% in 2019.
The IMF recently approved a loan to support economic reforms, recognizing the nation’s moderate risk of debt distress despite concerns over high interest rates and reliance on foreign aid.
While some economists argue that the debt is manageable, others warn that exceeding 49% could pose risks for smaller economies like Ivory Coast.
6. Democratic Republic of Congo – $1,599,000,000
The Democratic Republic of Congo (DRC) maintains a collaborative relationship with IMF through a three-year Extended Credit Facility (ECF) arrangement, initially approved in July 2021 for approximately $1.59 billion.
In December 2023, the IMF completed its fifth review, allowing a disbursement of about $202 million to bolster international reserves amid rising inflation, which peaked at 23.3% in mid-2023 due to currency depreciation and fiscal pressures.
The DRC’s debt levels remain a concern, with ongoing efforts needed to enhance governance and financial stability.
7. South Africa – $1,525,600,000
South Africa’s relationship with the IMF has been cautious, as the country has not frequently relied on IMF assistance since the end of apartheid.
Currently, South Africa’s gross government debt is approximately 70% of GDP, with significant challenges including high unemployment and economic stagnation.
The IMF assesses South Africa’s capacity to repay its debts as adequate, despite ongoing structural reforms needed to address economic issues.
South Africa owes about $1.52 billion to the IMF.
