Top 10 African countries with the most resilient import cover

Import cover measures how long a country’s foreign exchange reserves can sustain its imports, crucial for assessing resilience to external shocks.

It acts as insurance, assuring creditors and investors that the country can meet obligations, potentially attracting foreign direct investment and improving credit ratings.

For African countries, it provides a buffer against shifts in commodity prices, political instability, and debt pressures.

The 2024 African Trade Report, titled “Climate Implications of the AfCFTA Implementation,” emphasises that Capital inflows boosted the continent’s reserves, driven by greenfield projects, support from development finance institutions, bilateral partners, improved tourism, and remittances.

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“These positive developments helped raise (though modestly) the region’s average import cover to 5 months in 2023, up from 4.7 months in 2022, above the IMF threshold of 3 months”, the report highlighted.

These developments led to a notable currency upturn in 2023, with many appreciating against the US dollar compared to the previous year.

Here are the top 10 African countries with the most resilient import cover

1. Libya – 34.1 Months

Libya ranks first on the list, with an import cover of 34.1 months. The country’s substantial foreign exchange reserves have been bolstered by its oil revenues, which have historically provided a stable source of income. Despite political instability, Libya has maintained a relatively high reserve level compared to its import needs. The country’s capacity to cover more than two years of imports puts it in a strong position to manage external financial pressures.

2. Algeria – 16.5 Months

Algeria has an import cover of 16.5 months. Its economy is heavily dependent on oil and gas exports, which have helped the country accumulate significant reserves. The government’s conservative fiscal policies and focus on maintaining reserves have ensured that Algeria is well-equipped to cover its import bills for a relatively long period.

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3. Botswana – 10.1 Months

Botswana ties for third place with an import cover of 10.1 months. The country has long been noted for its prudent economic management, and its reserves are supported by its diamond industry. Botswana’s ability to cover over ten months of imports reflects its careful management of resources and its commitment to maintaining financial stability.

4. Mauritius – 10.1 Months

Mauritius also boasts an import cover of 10.1 months. As a small island economy, Mauritius relies heavily on imports, making a strong reserve position vital for its economic health. The country’s diversified economy, which includes tourism, financial services, and manufacturing, has enabled it to build and maintain significant reserves over time.

Read also: Top 10 African countries with the largest intra-African exports growth

5. Guinea-Bissau – 8.2 Months

Guinea-Bissau ranks fifth, with an import cover of 8.2 months. This West African country, although one of the poorest in the region, has managed to accumulate reserves that provide a buffer against external shocks. Its reserves are relatively stable, given the size of its economy and reliance on agricultural exports, particularly cashew nuts.

6. The Gambia – 7.7 Months

The Gambia comes in sixth place with an import cover of 7.7 months. The country’s reserves are essential to its small economy, which is highly dependent on agriculture and tourism. Maintaining an import cover of more than half a year allows The Gambia to mitigate the risks associated with currency fluctuations and international price changes.

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7. Angola – 7.7 Months

Angola also has an import cover of 7.7 months, tying with The Gambia. Angola’s reserves are driven primarily by its oil exports, which provide the bulk of the country’s foreign exchange earnings. Despite challenges such as inflation and a high cost of living, Angola’s reserve position helps cushion the economy against external shocks.

8. Togo – 7.6 Months

Togo ranks eighth with an import cover of 7.6 months. The country’s economy is relatively small and relies heavily on exports of agricultural products like cotton and phosphates. Togo’s reserves provide it with a safety net to cover import costs and manage its external payments.

Read also: Top mineral resources by African country – EIU

9. Equatorial Guinea – 7.3 Months

Equatorial Guinea ranks ninth, with an import cover of 7.3 months. Like several other countries on this list, Equatorial Guinea’s economy is largely driven by oil exports, contributing to its foreign exchange reserves. The country’s relatively high level of import cover offers some protection against potential disruptions in international trade.

10. Comoros – 7.1 Months

Comoros closes the top ten with an import cover of 7.1 months. The country’s economy heavily depends on imports for basic goods and services. Its reserves, though modest in absolute terms, are sufficient to cover imports for a little over half a year. This provides Comoros with a degree of economic stability and resilience.