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IMF: Nigeria Ranks Second Lowest in African Debt Burden

IMF: Nigeria Ranks Second Lowest in African Debt Burden

The IMF has revealed surprising news about Nigeria’s financial health, ranking it as the second least indebted country in Africa. This ranking is based on the debt-to-GDP ratio, a measure of economic strength.

Contrary to what many might think, having a lower debt-to-GDP ratio is a positive sign for a country’s stability. Tanzania leads the pack in Africa with a ratio of 41.8%, showcasing careful financial management.

Nigeria closely follows with a ratio of 41.3%, showing its significant economic role on the continent. Despite having an external debt of $41.59 billion or N31.98 trillion by December 2023, Nigeria maintains relatively modest debt levels.

Efficient debt management practices and a diverse economy contribute to Nigeria’s stable financial position. According to the Debt Management Office (DMO), Nigeria’s total debt stands at approximately N97.34 trillion.

Through careful debt management, Nigeria has maintained economic stability and boosted investor confidence, resulting in a favourable debt position despite its significant role in Africa’s economy.

African nations with low debt levels, like Nigeria, are not only more attractive to investors but also stand a higher chance of receiving additional financial support from global and local creditors, thanks to their reduced economic risk.

Nigeria’s higher ranking than Cameroon, Chad, Comoros, Equatorial Guinea, Guinea, Ethiopia, Botswana, and the Democratic Republic of Congo highlights its strong debt standing.

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