In a dramatic revelation that highlights Africa’s growing debt concerns, Nigeria, Africa’s largest economy, has been conspicuously absent from the list of African nations with the highest debts to the International Monetary Fund (IMF) in 2024. The updated data, released on December 23, paints a stark picture of economic dependency on IMF loans across the continent but raises critical questions about Nigeria’s fiscal strategy.
Egypt Leads Africa’s IMF Debt Race
Egypt emerges as the continent’s most indebted country to the IMF, with a staggering $9.3 billion outstanding. This figure dwarfs the debts of other nations, including Kenya ($3.02 billion), Angola ($2.9 billion), and Côte d’Ivoire ($2.75 billion). Ghana, a country that has often been compared to Nigeria for its economic trajectory, ranks fifth with $2.51 billion in IMF debt.
Other countries rounding out the top ten include the Democratic Republic of Congo (DRC) with $1.6 billion, Ethiopia at $1.31 billion, and South Africa with $1.14 billion. Cameroon ($1.13 billion) and Morocco ($1.1 billion) close out the list.
Nigeria’s exclusion from this list is striking, especially given the country’s history with IMF loans and structural adjustment policies.
Nigeria’s Debt Reality: A Different Strategy?
While Nigeria may not owe the IMF as much as its African counterparts, the government remains burdened by external debts. Between January and June 2024, Nigeria spent a staggering $2.24 billion servicing matured external loans.
The Federal Ministry of Finance revealed that $1.12 billion was spent in the first quarter of 2024 alone. These debts, while not specifically tied to the IMF, reflect Nigeria’s ongoing struggle to balance debt servicing with domestic economic challenges.
However, experts argue that Nigeria’s absence from the IMF debtors’ top list might not necessarily signal a more stable economy. According to economist Dr. Bayo Adekunle, “Nigeria’s exclusion could be due to its reliance on other forms of borrowing, such as Eurobonds and bilateral loans. These alternatives often come with higher interest rates and shorter repayment terms.”
The IMF’s Controversial Role in Africa
The IMF has long been a key player in Africa’s economic landscape, providing financial lifelines to countries in distress. However, its loans often come with stringent conditions under Structural Adjustment Programs (SAPs). These conditions—such as subsidy removal, currency devaluation, and privatization of public assets—have historically led to widespread social and economic discontent.
In Nigeria, the memories of SAPs from the late 1980s remain fresh. The measures introduced during that period triggered inflation, unemployment, and public protests, contributing to the economic hardship of many Nigerians.
“The Nigerian government likely wants to avoid repeating the mistakes of the past,” explains political analyst Amaka Eze. “This could be why they are steering clear of large-scale borrowing from the IMF, even if it means exploring costlier alternatives.”
A Regional Debt Crisis
For many African countries, IMF loans are both a lifeline and a liability. Egypt, for instance, has leveraged IMF assistance to stabilize its economy amid political and social upheavals. Kenya and Angola have similarly relied on these loans to navigate budget deficits and dwindling foreign reserves.
However, the dependence on IMF funds has sparked criticism. Many argue that the restrictive conditions attached to these loans hinder long-term development.
“IMF loans are like a double-edged sword,” notes Dr. Adekunle. “They provide immediate relief but can stifle economic growth in the long term by enforcing austerity measures that hurt the most vulnerable.”
What’s Next for Nigeria?
While Nigeria’s absence from the IMF debtors’ list might seem like a positive development, it raises questions about the country’s broader debt strategy. With over $2 billion spent on debt servicing in just six months, the strain on Nigeria’s finances is evident.
Moreover, Nigeria’s reliance on domestic borrowing and other foreign creditors comes with its own set of challenges. The country’s debt-to-GDP ratio has been a subject of debate, with critics warning of the risks of unsustainable borrowing.
“The focus should not just be on avoiding IMF debt,” warns Ms. Eze. “The government must ensure that whatever borrowing it undertakes is used productively to stimulate economic growth and create jobs.”
