Here are 10 African countries with the least IMF debt in Q3 2024

Africa’s economic framework is often a subject of global interest, especially regarding its financial relationships with international institutions like the International Monetary Fund (IMF).

One key indicator that shapes economic policy and long-term sustainability is the level of outstanding credit a country owes to the IMF.

Debt levels are a critical aspect of a nation’s financial health, as they influence public spending, currency valuation, and investment appeal. In the third quarter of 2024, several African nations maintained low outstanding IMF debts, signalling relatively modest external financial dependence.

Read also: UPDATED: Top 10 African countries with low IMF Debt

According to the IMF, here are the 10 African countries with the lowest total IMF credit outstanding as of 07/19/2024

Lesotho

Lesotho with the smallest IMF debt, amounting to approximately $11.7 million, with its largely agrarian economy, has historically relied on remittances and its garment industry for economic stability.

Lesotho’s low debt to the IMF highlights the government’s cautious approach to borrowing. Given its challenges such as unemployment and high poverty rates, maintaining low external debt allows the government to focus on domestic fiscal policies that aim to improve living standards without the burden of heavy loan repayments.

Comoros

The Union of Comoros with just under $19 million in IMF credit outstanding holds the second spot. Despite economic vulnerabilities linked to its small size and geographic isolation, Comoros has benefited from international aid and remittances from its diaspora.

Its low IMF debt suggests that it has been able to manage its financial obligations with a level of prudence. The country continues to depend on agriculture and tourism, with cautious engagement in external borrowing.

Read also: UPDATED, top 10 African countries facing the biggest IMF debts

Sao Tome and Principe

This two-island nation in the Gulf of Guinea ranks third on the list with a total IMF debt of just over $24 million. Sao Tome and Principe’s debt levels reflect its limited reliance on international financial institutions for economic stability.

The country has been investing in tourism and the development of oil and gas reserves, which could reduce the need for external borrowing. Although its economy is small, its strategic investments and financial discipline have contributed to its relatively low debt profile.

Djibouti

Djibouti’s strategic location near key shipping lanes has made it an attractive site for foreign military bases and commercial ports. Despite being a small economy, Djibouti has managed to keep its IMF credit outstanding to a modest $31.8 million.

The country’s economic policy focuses on positioning itself as a trade and logistics hub, which has helped it reduce reliance on external borrowing. However, it faces challenges such as high unemployment and poverty, which will require more targeted economic policies in the future.

Read also: Africa’s 10 most indebted countries

Eswatini

Eswatini, formerly known as Swaziland, has an IMF debt of approximately $39.25 million. The country relies heavily on agriculture, particularly sugar exports, and has a relatively small industrial base.

Its low debt to the IMF reflects a cautious approach to borrowing, especially given its recent economic challenges related to unemployment and inequality. The country is working to diversify its economy, with investments in manufacturing and energy aimed at reducing reliance on international borrowing in the future.

Guinea-Bissau

Ranking sixth, Guinea-Bissau has an outstanding IMF debt of around $48.9 million. The West African country is known for its cashew exports but struggles with political instability and weak infrastructure, which have hindered economic growth.

Despite these challenges, its relatively low IMF debt indicates that the country has avoided over-borrowing. Guinea-Bissau will need to continue managing its financial obligations carefully while seeking international assistance for development projects to spur growth.

Read also: 10 least indebted African countries in 2024 – IMF

Cape Verde

Cape Verde has a total IMF debt of nearly $65 million. Known for its stable democracy and strong tourism sector, Cape Verde’s economy has grown steadily, allowing it to keep external borrowing under control.

The country’s reliance on tourism and remittances has helped it maintain a manageable level of debt, although future economic challenges may arise due to external shocks, such as changes in global travel trends or climate-related impacts on the islands.

Equatorial Guinea

Equatorial Guinea, one of Africa’s major oil producers, owes approximately $74.1 million to the IMF. While the country’s wealth is largely tied to oil exports, it has faced criticism for poor governance and unequal wealth distribution.

Despite this, its relatively low debt to the IMF reflects its ability to generate significant revenues from oil, allowing it to avoid high levels of external borrowing. However, with global efforts to transition away from fossil fuels, Equatorial Guinea may face challenges in maintaining this low debt level in the future.

Read also: Top 10 countries indebted to China – World Bank

Somalia

Somalia, a country plagued by decades of conflict and instability, ranks ninth with an IMF debt of around $79.5 million. The country has made strides in recent years to stabilize its economy, particularly through reforms supported by the IMF.

Somalia has managed to keep its external debt relatively low, which is a testament to the IMF’s debt relief programs and Somalia’s adherence to reform measures. The country continues to rebuild its economy, with agriculture and remittances playing a key role in its recovery.

Seychelles

The last on the list, Seychelles owes just over $97 million to the IMF. Despite its heavy reliance on tourism, Seychelles has managed to keep its external borrowing in check.

The country’s economic policies have focused on sustainable tourism, environmental conservation, and careful fiscal management, all of which have helped keep IMF debt low. However, Seychelles remains vulnerable to external shocks such as climate change and global travel disruptions, which could impact its debt levels in the future.