The International Monetary Fund (IMF) has warned that the debt-GDP ratio of Nigeria, the biggest economy in the sub-Saharan region, could hit 68 percent, as it suffers from lower oil prices and demand.
In a special report, the IMF said sub-Saharan Africa faces a huge challenge, made worse by the coronavirus pandemic, to find nearly $900 billion to repay massive debt and fund essential public spending.
The Debt-GDP ratio is the ratio between a country’s total debt and its Gross Domestic Product, (GDP), which is total annual economic output.
The IMF noted that the sub-Saharan region had been on course to reduce its debt burden, but said it now looks as if the debt-GDP ratio will hit 65 percent by the end of this year, whereas it had been relatively stable at 55 percent.
It added that the region would require some $890 billion in external financing – equal to 55 percent of its GDP – between now and 2023.
While the G-20 countries have offered African states debt relief, they should do more and be “more audacious” in their help, the IMF said.