Which Country Has The Highest Debt In Africa

Identifying which country that has the highest debt in Africa involves analyzing the debt to GDP ratios and the total external borrowing figures of various nations across the continent. Currently, Eritrea and Sudan are frequently cited at the top of these rankings due to debt levels that significantly exceed their annual economic output. This financial challenge is a critical factor in regional economic stability and dictates the fiscal policies of many developing African states as they struggle to balance infrastructure growth with repayment obligations.

Understanding the burden of these loans is essential for assessing the long term growth prospects and the risk levels associated with international investments in the region. As many nations navigate the complexities of global finance, the accumulation of debt remains a central theme in their developmental journey during the twenty first century.

These are the Countries that have the highest debt in Africa

The financial landscape of the continent has been significantly impacted by a series of global economic shocks, leading to a surge in borrowing for many governments. While some nations have borrowed to fund massive infrastructure projects, others have taken on loans to mitigate the effects of currency depreciation and rising food prices. When we examine the African country which has the highest debt, we must distinguish between the absolute dollar amount and the debt to GDP ratio, which measures the debt relative to the size of the economy. High debt levels often lead to a situation where a large portion of a nation’s revenue is spent on interest payments rather than essential public services like healthcare and education. Here is a detailed look at the nations currently facing the most significant debt challenges on the continent, based on data from the International Monetary Fund and the World Bank.

1. Eritrea

Eritrea consistently ranks at the very top when discussing which country in Africa that has the highest debt relative to its economic size. The nation’s debt to GDP ratio has historically hovered above 160 percent and has at times exceeded 200 percent, making it one of the most leveraged countries in the world. This situation is largely due to the country’s relative isolation and a lack of diversified economic activity, which limits its ability to generate the revenue needed to service its obligations. Most of Eritrea’s debt is domestic, meaning it is owed to internal institutions, but the lack of transparency in its national accounts makes a full assessment difficult for international observers. The government has faced immense pressure to reform its fiscal policies, yet the military and political landscape often takes precedence over economic restructuring. For decades, the lack of foreign direct investment has forced the state to rely on internal borrowing, creating a cycle of high debt that hampers long term development projects. The resilience of the economy is constantly tested by these heavy fiscal burdens.

2. Sudan

Sudan is another primary example of a nation with a staggering debt burden, with its total debt to GDP ratio often reaching above 150 percent in recent years. For a long time, Sudan was excluded from international debt relief programs due to political sanctions and its status on various global lists, which caused interest and arrears to accumulate to massive levels. The country owes billions of dollars to both bilateral creditors and private lenders, a legacy of the previous administration’s economic mismanagement. While there were significant moves toward debt relief under the Heavily Indebted Poor Countries initiative, the recent internal conflicts have severely derailed these efforts. The suspension of international aid and the destruction of infrastructure have further crippled the nation’s ability to manage its finances. Sudan’s debt is not just a financial number but a massive hurdle to its future stability and its ability to rejoin the global financial community. The sheer scale of the arrears means that without significant international intervention, the debt will remain an insurmountable obstacle.

3. Zambia

Zambia gained global attention in 2020 when it became the first African nation to default on its sovereign debt during the height of the global pandemic. The African country which has the highest debt concerns in Southern Africa, Zambia’s debt crisis was fueled by a massive borrowing spree used to fund ambitious transport and energy infrastructure. The country’s external debt reached over 18 billion dollars, with a significant portion owed to Chinese lenders and private Eurobond holders. This default triggered a long and complex restructuring process that has tested the new Common Framework for debt treatment. The Zambian government has had to implement strict austerity measures and seek help from the IMF to stabilize the Kwacha and bring inflation under control. Despite these challenges, Zambia has made progress in reaching agreements with its major creditors, serving as a bellwether for other nations in similar distress. The situation highlights the risks of relying on high interest commercial loans for long term developmental goals without adequate revenue growth.

4. Ghana

Ghana was once seen as one of the rising stars of the West African economy, but it has recently joined the ranks of the countries in Africa that have the highest debt. The nation faced a severe fiscal crisis in 2022 and 2023, leading to a debt to GDP ratio of nearly 90 percent and a subsequent suspension of payments on most of its external debt. Ghana’s predicament was caused by a combination of heavy spending, a sharp depreciation of the Cedi, and a loss of access to international capital markets. The government was forced to launch a domestic debt exchange program, which impacted local banks and individual investors, to meet the requirements for a three billion dollar IMF bailout. This economic downturn has resulted in high inflation and increased living costs for the average Ghanaian citizen, sparking widespread public debate over fiscal responsibility. The recovery process is expected to take years, as the country works to restructure its massive Eurobond obligations and bilateral loans. Ghana’s experience serves as a cautionary tale about the volatility of middle income economies that become over dependent on foreign currency borrowing.

5. Egypt

Egypt possesses the largest absolute amount of external debt in North Africa, with the figure surpassing 160 billion dollars as the government continues its massive infrastructure drive. The construction of the New Administrative Capital and various Suez Canal expansion projects have required immense capital, much of which has been sourced from international lenders and Gulf allies. While Egypt’s debt to GDP ratio is lower than that of Eritrea or Sudan, the sheer volume of the debt and the high cost of servicing it have placed a significant strain on the national budget. The Egyptian government has recently taken steps to sell state assets and implement currency reforms to secure further funding from the IMF and regional partners. The strategic importance of Egypt often allows it to secure more favorable terms than smaller nations, but the pressure to maintain its social safety nets while paying back creditors remains a delicate balancing act. For Egypt, the debt is a tool for rapid modernization, but it also represents a significant risk if the expected economic returns from these mega projects do not materialize quickly enough.

6. Nigeria

Nigeria is often cited in discussions about African countries that have the highest debt not because of its ratio, which is relatively moderate at around 40 percent, but because of its debt to revenue ratio. The Nigerian government spends a staggering percentage of its actual revenue—sometimes exceeding 90 percent—simply to pay the interest on its existing loans. This leaves very little room for capital expenditure or social programs, forcing the country into a cycle of borrowing to cover basic operational costs. Nigeria’s debt is a mix of high interest domestic bonds and external loans from multilateral agencies and the Chinese government. The recent removal of fuel subsidies and the floating of the Naira were aimed at increasing government revenue and making the debt more sustainable, but these moves have also caused significant short term hardship. As the largest economy on the continent, Nigeria’s debt management is closely watched, as a financial crisis there would have massive implications for the entire West African region. The challenge for Nigeria lies in expanding its tax base to ensure that it can afford the debt it has already accumulated.

7. Ethiopia

Ethiopia has seen its debt levels rise sharply following a period of intense civil conflict and the heavy costs of its industrialization strategy. The country recently defaulted on a 33 million dollar coupon payment for its only Eurobond, marking its entry into the group of African nations in formal debt distress. Ethiopia has used large loans to build industrial parks, railways, and the Grand Ethiopian Renaissance Dam, hoping that these would spur an export led growth model. However, the conflict in the Tigray region and the global rise in interest rates have made it difficult for the nation to maintain its repayment schedule. The government is currently seeking a major debt restructuring under the G20 Common Framework, similar to Zambia and Ghana. The Ethiopian economy remains one of the fastest growing in East Africa, but the lack of foreign exchange and the high debt burden have created a severe liquidity crisis. The success of Ethiopia’s future depends on its ability to convince creditors that its long term growth potential remains intact despite these temporary setbacks.

8. Kenya

Kenya is frequently mentioned as a country in Africa that has the highest debt concerns in the East African Community, with a debt to GDP ratio that has climbed toward 70 percent. The Kenyan government has borrowed heavily to fund the Standard Gauge Railway and a network of new highways, much of which was financed by China. There is a growing public concern in Kenya regarding the "debt trap" narrative and the high cost of living associated with new taxes introduced to service these loans. In 2024, the government faced significant challenges in repaying a two billion dollar Eurobond, eventually having to issue a new, more expensive bond to cover the old debt. This "rolling over" of debt at higher interest rates has increased the fiscal pressure on the National Treasury. Kenya remains a hub for regional trade and technology, but its economic successes are often overshadowed by the looming shadow of its debt obligations. The government’s ability to manage its fiscal deficit while keeping the population satisfied is a major political and economic challenge.

9. Mozambique

Mozambique’s debt history is famously marred by the "hidden debt" scandal, where over two billion dollars in loans were secretly taken out by government-owned companies without parliamentary approval. This discovery in 2016 led to a total collapse of donor confidence and a subsequent economic crisis that the country is still recovering from today. Mozambique’s debt to GDP ratio remains high, and the nation has spent much of the last decade in various stages of default and restructuring. The hope for the country lies in its massive offshore natural gas reserves, which are expected to generate billions in revenue once production reaches full capacity. However, the ongoing insurgency in the northern Cabo Delgado province has delayed some of these projects, prolonging the nation’s debt misery. Mozambique is a prime example of how lack of transparency and poor governance can turn manageable borrowing into a national catastrophe. The legal battles surrounding the hidden debt continue in international courts, reflecting the long lasting impact of this financial scandal.

10. Cape Verde

Cape Verde, an island nation in the Atlantic, has one of the highest debt to GDP ratios on the continent, often exceeding 120 percent. As a small, tourism dependent economy, Cape Verde was uniquely vulnerable to the global travel shutdowns during the pandemic, which saw its revenue evaporate almost overnight. To keep the economy afloat and provide social support to its citizens, the government had to increase its borrowing significantly. Much of Cape Verde’s debt is highly concessional, meaning it has very low interest rates and long repayment periods, which makes the high ratio slightly less dangerous than it would be for a larger nation. However, the sheer size of the debt relative to the country’s limited resources means that it remains in a position of high debt distress. The government is focusing on diversifying into the blue economy and renewable energy to create new revenue streams. For Cape Verde, the challenge is maintaining its high standards of human development while slowly chipping away at its massive mountain of debt.

11. Tunisia

Tunisia is facing an increasingly precarious debt situation, with its debt to GDP ratio rising to nearly 80 percent amidst political and social unrest. The country’s economy has stagnated for over a decade, and the government has relied on loans to pay the salaries of its massive public sector and to fund expensive subsidies. Negotiations with the IMF for a nearly two billion dollar loan have been stalled for months due to the government’s reluctance to implement the required economic reforms, such as cutting subsidies. This delay has led to fears that Tunisia might eventually follow the path of Lebanon or Ghana into a full scale sovereign default. The nation’s credit rating has been downgraded multiple times, making it nearly impossible to borrow from private international markets at affordable rates. Tunisia’s debt crisis is deeply linked to its political transition, and without a consensus on economic policy, the fiscal pressure is likely to continue growing. The country remains a vital part of the Mediterranean economy, but its financial future is currently shrouded in uncertainty.

12. Sierra Leone

Sierra Leone continues to struggle with a high debt burden that has its roots in the long recovery from its civil war and the devastating 2014 Ebola outbreak. The nation’s debt to GDP ratio is around 75 percent, and a significant portion of its budget is consumed by the costs of servicing these loans. Sierra Leone is heavily dependent on the export of minerals like diamonds and iron ore, making its revenue highly sensitive to fluctuations in global commodity prices. When prices are low, the government is often forced to borrow just to meet its basic administrative expenses. The country has worked closely with international partners to implement fiscal reforms and improve tax collection, but the progress has been slow. Sierra Leone’s debt situation is a reminder of the "fragility trap" where poor nations are forced to borrow for survival rather than for growth-enhancing investments. The ongoing efforts to improve transparency and reduce corruption are essential for the nation to eventually break free from its debt cycle.

Reasons Why These Countries Have Highest Debt In Africa

1. Massive Investment in Infrastructure Mega-Projects: One of the primary reasons African countries that have the highest debt found themselves in this position is the rush to modernize through large scale construction. Nations like Kenya, Ethiopia, and Egypt have borrowed billions to build railways, dams, and new cities, believing that these assets would eventually pay for themselves through increased trade and industrialization. However, the time it takes for these projects to become profitable is often much longer than the repayment period of the loans. When the expected economic boom is delayed, governments are left with massive bills and limited revenue to cover them.

2. Devastating Impact of Global Economic Shocks: The COVID-19 pandemic and the subsequent war in Ukraine acted as a "perfect storm" for many African economies, pushing them toward debt distress. Many countries in Africa that have the highest debt saw their primary sources of income, such as tourism and commodity exports, vanish overnight during the lockdowns. At the same time, the cost of importing fuel and grain skyrocketed due to global supply chain disruptions. To prevent a total social collapse, many governments had no choice but to borrow emergency funds at high interest rates, leading to the rapid accumulation of debt seen today.

3. Sustained Currency Depreciation Against the Dollar: Because a significant portion of the debt in African countries that have the highest debt is denominated in US dollars, any drop in the value of the local currency makes the debt more expensive to repay. In countries like Nigeria, Ghana, and Kenya, the local currencies have lost substantial value over the last two years, effectively increasing the size of their debt without any new borrowing. This means that even if a government is fiscally responsible, they can still fall into a debt crisis simply because of global exchange rate movements. This "original sin" of borrowing in foreign currency is a major driver of financial instability across the continent.

4. High Interest Rates on Commercial Borrowing: In the past decade, many African nations shifted away from low interest loans from the World Bank toward high interest Eurobonds and private bank loans. While this provided quick cash with no "policy strings" attached, it also meant that the country in Africa that has the highest debt was paying 8 to 12 percent interest instead of 1 or 2 percent. As global interest rates rose in response to inflation in the US and Europe, the cost of "rolling over" or refinancing this debt became unsustainable. Many nations are now stuck in a trap where they are borrowing new money just to pay the high interest on their old commercial loans.

5. Lack of Diversified Export Bases: Many of the nations with the highest debt levels rely on a single commodity, such as oil, copper, or diamonds, for their foreign exchange earnings. When the global price of these commodities drops, the African country which has the highest debt suddenly finds itself unable to earn the dollars needed to pay its creditors. This over-reliance on a few raw materials makes these economies extremely fragile and prone to sudden debt crises. Without a strong manufacturing or service sector to provide a stable income, these nations remain at the mercy of global market fluctuations that they cannot control.

6. Challenges with Governance and Fiscal Transparency: In some cases, the accumulation of debt is a result of poor management or a lack of oversight in the borrowing process. The hidden debt scandal in Mozambique and the opaque loan terms in several other nations have shown that when debt is not properly tracked, it can quickly spiral out of control. Many African countries that have the highest debt have struggled with corruption and inefficient tax systems, meaning that even when they do borrow for good projects, much of the money is lost to waste. Improving financial transparency and accountability is the most critical step for these nations to regain the trust of international investors and stabilize their economies.

Conclusion

In summary, identifying which country that has the highest debt in Africa requires a look at both the staggering ratios in Eritrea and Sudan and the massive absolute borrowing of Egypt and Nigeria. This debt crisis is the result of a complex interplay between ambitious developmental goals, global economic shocks, and the inherent risks of borrowing in foreign currencies. While the situation is challenging, the ongoing restructuring efforts in Zambia and Ghana provide a potential roadmap for how other nations might eventually achieve fiscal stability. The future of the continent depends on whether these African countries that have the highest debt can successfully transition toward more sustainable revenue models and diversified economies. Ultimately, the country in Africa that has the highest debt is often the one that most urgently needs international cooperation and systemic reform to ensure its citizens can enjoy the benefits of a debt-free future.