Therefore, by comparing the ratio of a country's public debt in relation to its GDP, decisionmakers and multilateral lenders can obtain reliable insight/understanding about the country's capability with regards to paying back its debts.
"By comparing what a country owes with what it produces, the debt-to-GDP ratio reliably indicates that particular country’s ability to pay back its debts. Often expressed as a percentage, this ratio can also be interpreted as the number of years needed to pay back debt if GDP is dedicated entirely to debt repayment," says Investopedia.
Discussions about the debt-to-GDP ratio of African countries is especially important at a point, considering the fact that the public debt stock across the continent have been climbing to levels never before seen in the history of modernity.
A recent report by the World Bank showed that more than half of the world's low-income countries, most of which are in Africa, are either currently grappling with debt distress or at risk of doing so. This is according to a blog post that was recently published on the World Bank's website.
Also, Standard Bank Group recently red-flagged Ghana, Kenya Ethiopia, Zambia and Angola as African countries that could soon experience serious debt risks.
That said, below are 20 African countries with the highest debt-to-GDP ratios. This list is courtesy of a report by Statista dated December, 2021. Although the exact figures of these countries' public debts were not disclosed, the percentage of debt to GDP are clearly indicated as you can see below.
- Eritrea: The national debt in this Horn of Africa country stands at 175.1% of the GDP.
- Cabo Verde: This island nation has a debt-to-GDP ratio of 160.7%.
- Mozambique: Mozambique has a debt-to-GDP ratio of 133.6%.
- Angola: This Southern African country has a debt-to-GDP ratio of 103.7%.
- Mauritius: This island country's gross debt stands at 101% of its GDP.
- Zambia: Zambia's gross national debt also stands at 101% of its GDP.
- Republic of Congo: This country in Central Africa has a debt-to-GDP ratio of 85.4%.
- Ghana: Ghana's debt to GDP ratio currently stands at 83.5%.
- The Gambia: In this country, the debt-to-GDP ratio is at 82.3%.
- Seychelles: This island country has a debt-to-GDP ratio of 81.9%.
- Guinea-Bissau: This country's debt-to-GDP ratio currently stands at 79.1%.
- Rwanda: Rwanda's debt-to-GDP is at 74.8%.
- Burundi: The Eastern African country has a debt-to-GDP ratio of 72.4%.
- Gabon: In Gabon, the debt-to-GDP ratio is 72.1%.
- Senegal: This Francophone West African country has a debt-to-GDP ratio of 71.9%.
- Sierra-Leone: The Anglophone West African country has a debt-to-GDP ratio of 71.1%.
- Namibia: This country has a debt-to-GDP ratio of 69.9%.
- Kenya: Kenya's debt-to-GDP ratio is 69.7%.
- South Africa: This country has a debt-to-GDP ratio of 68.8%.
- South Sudan: South Sudan has a debt-to-GDP ratio of 64.4%.