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Africa's Debt-to-GDP Accumulation: 2028 Forecast
Africa's debt-to-GDP ratio has experienced significant growth over the past decade as governments have increasingly borrowed to finance infrastructure projects and address urgent fiscal needs. The surge in debt accumulation has caused the debt-to-GDP ratio to rise from an average of 23.2% in 2008 to 57.1% by 2022 in Sub-Saharan Africa. Some countries, like Cabo Verde, Sudan, and Mozambique, have even surpassed the internationally recognized sustainable debt thresholds, raising the specter of debt distress.
According to the World Bank's Debt Sustainability Analysis, 8 African countries were already in debt distress by 2023, unable to meet their repayment obligations. An additional 15 were at high risk, while 14 faced moderate risks of falling into debt distress. These challenges are further compounded by Africa's relatively low revenue mobilization, with a tax-to-GDP ratio of only 15.6%.
Related Report
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The Future of Fintech in Africa
Eighteen percent of the world’s population lives in Africa, and 57% of Africans are ‘unbanked’, without a bank account or a digital wallet. This presents a massive opportunity, making fintech the most dominant and funded tech sector in Africa today. This special report highlights how African fintechs not only have one of the largest total addressable markets globally but are also crucial for achieving financial inclusion and empowering unbanked populations. The potential impact of a successful fintech in Africa is unparalleled. To learn more about the drivers, barriers, and opportunities in African fintech, as well as progress toward financial inclusion, read the special report.
