There is increased International Monetary Fund (IMF) pressure on African countries to reduce public expenditure and cut or freeze public sector wage bills for fear of sliding into debt distress.
Africa’s increasing debt-to-GDP ratio over the past 10 years has seen many sub-Saharan countries ranked as being at a high risk of defaulting with some already in debt distress.
As of 19th April 2024, Africa accounts for 38% of the total IMF loans worldwide, with an outstanding amount of SDR 42,455,269,378.
At an IMF SDR currency valuation of SDR1 to US$1.315, Africa’s outstanding credit stood at US$ 55.8 billion.
15 African countries, owe more than US$ 1 billion each, accounting for about 80% of IMF loans to Africa. Out of these, 7 countries owe more than US$ 2 billion.
The most indebted country, by far is Egypt at 14.8 billion followed by Angola, Kenya, South Africa, and Ghana.
Here are 7 African countries with the highest IMF outstanding debts.
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1. Egypt (US$ 14.8 billion)
Egypt is the most IMF-indebted country in Africa and the second most indebted in the world after Argentina.
Egypt’s economy almost collapsed after the 2011 revolution, with the country turning to the IMF for help.
In 2016, Egypt entered into an IMF deal that unlocked a US$ 12 billion facility.
Reduced revenue from the Suez Canal partly due to the impact of Covid-19 would see Egypt secure an additional US$ 7.92 billion from the fund.
Facing further economic struggles due to the wars in Ukraine and Gaza, the country has been subjected to stringent IMF structural adjustment programs to unlock more credit from the fund.
A deal to unlock a further US$ 8 billion has seen Egypt commit to new staff-level agreements and the devaluation of the country’s currency aimed at seeing the Egyptian Pound exchanged at liberal market rates.
2. Angola (US$ 4 billion)
In December 2018, the IMF approved a facility of US$3.7 billion to help oil-rich Angola cope with the effect of the collapse of global crude oil prices on its budget in a program dubbed Extended-Fund-Facility (EFF).
2019 saw the country receive US$247 million to support structural economic and governance reforms.
In 2021, the IMF disbursed $772 million and $748 million bringing total disbursements to about $4.5 billion.
According to the IMF’s August 2023 Post-Financing assessment, Angola’s capacity to repay the Fund is adequate, given stable global oil prices and ongoing economic reforms.
The report however points to Angola’s declining oil production as a potential risk that it will keep monitoring.
Angola is the second biggest oil exporter in Africa with oil accounting for about 65% of its tax revenue.
3. Kenya (US$ 3.4 billion)
Kenya has three ongoing credit facilities with the IMF; the Extended Fund Facility (EFF), the Extended
Credit Facility (ECF), and the Resilience and Sustainability Facility (RSF).
Through the EFF/ECF facilities, IMF approved a US$ 2.34 billion pipeline on 2nd April 2021.
This has been augmented over time, the latest being a January 2024 approval of a US$941 million loan, with US$624.5 million being disbursed immediately to ease the country’s liquidity pressures.
This IMF credit came at a time when Kenya was grappling with dwindling foreign currency reserves amidst a $2 billion Eurobond that was due to mature in June 2024.
While Kenya’s public debt to GDP is at an all-time high of about 70%, the IMF’s reviews signal that the government’s ongoing policy measures and Kenya’s prospects for growth make the public debt sustainable in the medium term.
4. South Africa (US$ 3 billion)
July 2020 marked the first time since the end of apartheid that South Africa turned to the IMF for help. It agreed to a US$ 4.3 billion loan from the IMF with US$ 3,051,200,000 being disbursed immediately.
While opposition parties and several elements even within the ruling ANC party opposed the move, the country’s overwhelming economic problems demanded the intervention.
IMF forecasts show near-zero growth projections for Africa’s most industrialized economy at 1% and 1.3% for 2024 and 2025 respectively.
5. Ghana (US$ 2.7 billion)
The Covid-19 pandemic saw Ghana move from being the world’s fastest-growing economy in 2019 to an unprecedented financial crisis with inflation rates peaking at 54.1% as per Ghana Statistical Service.
Amid the severe economic crisis and an unsustainable debt burden, the IMF approved a US$ 3 billion 3-year Extended Credit Facility (ECF) arrangement to support Ghana’s post-COVID economic recovery program.
6. Cote d’Ivoire (US$ 2.6 billion)
In April 2023, Ivorian authorities and IMF reached a staff-level agreement on economic policies and reforms that opened up a US$ 3.5 billion credit line under its existing Extended Fund Facility (EFF)/ Extended Credit Facility (ECF).
This followed an earlier agreement for a US$1.3 billion loan under a Rapid Financing Instrument (RFI) with a 20-year repayment plan and a 10.5-year grace period.
Several disbursements have been made to the country in the recent past including; US$ 495.2 million in December 2023 and U.S.$495.4 million in April 2023.
7. Nigeria (US$ 2 billion)
In 2020, the IMF approved US$3.4 billion under the Rapid Financing Instrument (RFI) to mitigate economic shocks from the Covid-19 pandemic and falling oil prices.
Here is a list of other African countries that owe the International Monetary Fund about US$ 1-2 billion as of 19th April 2024;
- The Democratic Republic of Congo (DRC) – US$ 1.90 billion
- Morocco – US$ 1.74 billion
- Senegal – US$ 1.54 billion
- Cameroon – US$ 1.4 billion
- Tunisia – US$ 1.38 billion
- Uganda – US$ 1.31 billion
- Sudan – US$ 1.30 billion
- Tanzania – US$ 0.97 billion
