Nigeria is one of the 10 African countries that collectively hold 69 per cent of the continent’s total external debt, according to a report by Afreximbank Research.

The report, which was 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.

It said Nigeria accounts for eight per cent of this debt. The 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.

According to the Debt Management Office, Nigeria’s total public debt rose to N142.3tn as of September 30, 2024, representing an increase of 5.97 per cent (N8.02tn) compared to N134.3tn in June 2024.

In the first three quarters of 2024, debt servicing was in excess of N7tn on the back of higher obligations to multilateral and bilateral creditors, alongside significant interest payments on commercial loans.

The Afreximbank Research also sheds light on the broader issues that have contributed to Africa’s increasing debt burden. These include infrastructure development, healthcare, and education costs in emerging markets, which often necessitate extensive financing through loans and other debt instruments.



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