List: How indebted are African economies?

Which African countries are highly indebted? How do Horn of African economies fare in this regard? Where does Ethiopia rank compared to her peers?Map-African-nations-with-flag_thumb

A Debt-to-GDP ratio is the common tool used to measure the level of indebtedness of a country. Though there is no consensus on an optimal level, a debt-to-GDP ratio of 60% is often cited as a prudential limit for developed countries. For developing and emerging economies, 40% is the suggested debt-to-GDP ratio that should be sustained on a long-term.

Here below are two lists: The data for African nations in general and for East Africa in particular based 2013 data. [You may read brief explanations on technical terms at the bottom]

Highlight:

* Ethiopia is at 40th place with a an external debt to GDP ratio of 18.3 at 2013.

* Countries with comparable GDP size to Ethiopia such as Kenya (30.5%), Côte d’Ivoire (45.6%), Sudan (63.9%), Tunisia(55.9) and Ghana(29.3); all have higher external debt as a percentage of their GDP.

No.

East Africa

%of GDP
1. Sudan 63.9
2. Djibouti 48.4
3. Seychelles 38.7
4. Tanzania 36.4
5. Kenya 30.5
6. Uganda 26.7
7. Eritrea 25.7
8. Burundi 20.5
9. Ethiopia 18.3
10. Rwanda 17.6
11. Comoros 17.5
12. Somalia
13. South Sudan

* Ethiopia’s Debt to GDP ratio for 2014 is estimated to be 20%.

The country with a higher external Debt to GDP is at the top of the list (Mauritania 101.9%) and the least debtor is placed at the bottom (Algeria 1.6%)

No. Africa %of GDP No. Africa %of GDP
1. Mauritania 101.9 27. Malawi 25.5
2. Cabo Verde 91.8 28. Guinea 23.7
3. Zimbabwe 87.5 29. GuineaBissau 22.7
4. Senegal 68.5 30. Botswana 22.6
5. Sao Tome 65 31. Burkina Faso 22.5
6. Sudan 63.9 32. Mauritius 22.5
7. Tunisia 55.9 33. Congo 21.4
8. Niger 55.3 34. Sierra Leone 21.3
9. Mozambique 53.4 35. Angola 21.1
10. Lesotho 49.1 36. Gabon 20.7
11. Djibouti 48.4 37. Chad 20.6
12. Madagascar 46.2 38. Burundi 20.5
13. Côte d’Ivoire 45.6 39. Congo, DR 20.3
14. Gambia 42.2 40. Ethiopia 18.3
15. Namibia 41.9 41. Rwanda 17.6
16. Seychelles 38.7 42. Comoros 17.5
17. South Africa 36.9 43. Togo 17.4
18. Tanzania 36.4 44. Egypt 17.3
19. CAR 34.7 45. Benin 16.2
20. Zambia 34.4 46. Swaziland 13.5
21. Kenya 30.5 47. Liberia 10.8
22. Morocco 30.4 48. Cameroon 9.3
23. Ghana 29.3 49. Libya 6.8
24. Mali 26.8 50. Equ. Guinea 5.5
25. Uganda 26.7 51. Nigeria 3.2
26. Eritrea 25.7 52. Algeria 1.6

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Technical terms and notes

*External Debt: External Debt (total outstanding debt) is the amount, at any given time, of disbursed and outstanding contractual liabilities of residents of a country to non-residents to repay principal, with or without interest, or to pay interest with or without principal. It is the sum of public and publicly- guaranteed short and long-term debt, private non-guaranteed short and long-term debt and the use of IMF credit.

*The data is calculated by level of external debt As a percentage (%) of GDP (Debt-GDP-Ratio)

*The data used here is of 2013 and sourced from African Statistical Yearbook 2014 published by the African Statistical Coordination Committee (AfDB, AU, ECA).

*Ethiopia’s peer/comparable economies are selected based on their GDP (at current market prices size and PPP valuation)

Source:: Danielberhane

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