Which African countries are highly indebted? How do Horn of African economies fare in this regard? Where does Ethiopia rank compared to her peers?
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 |
—–
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)
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