High debt-to-GDP Ration. Photo/AI generated.
The debt-to-GDP ratio is a vital economic metric that provides insights into a country’s fiscal health and economic stability. It serves as a key indicator of a nation’s ability to manage its debt obligations relative to the size of its economy.
- Republic of the Congo – 99.57%
- Cape Verde – 127%
- Sierra Leone – 98.8%
- Ghana – 88.8%
- Gambia – 80.8%
- Eritrea – 164%
- Senegal – 75%
- Morocco – 71.6%
- Egypt – 87.2%
- Mozambique – 101%
- Mozambique – 101%
A low debt-to-GDP ratio is often considered a sign of economic stability. It indicates that the economy generates enough income to comfortably manage its debt obligations. On the other hand, a high ratio may signal potential difficulties in repaying debts.
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The debt-to-GDP ratio measures a country’s total debt relative to its economic output, represented by its GDP. This simple yet effective metric provides a clear snapshot of a nation’s debt burden compared to the size of its economy, expressed as a percentage.
Global investors frequently take a country’s debt-to-GDP ratio into account when making investment decisions. A lower ratio is generally more appealing, as it suggests a reduced risk of default, potentially leading to lower interest rates on government bonds. This explains why many African countries do not attract investors, while those who’ve invested are closing doors.
High debt-to-GDP ration can also be linked to mismanagement and corruption that puctuates some countries leading to high poverty and poor economic growth.
According to Trading Economics, below are the African countries with the highest debt-to-GDP ratios .This platform provides accurate data for 196 countries, including historical information and projections for over 20 million economic indicators, currency rates, stock market indices, government bond yields and commodity prices.This list includes data up to December 2022.
