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The global economic crisis initiated by the Covid-19 pandemic and the repercussions of regional conflicts has deeply impacted the public finances of many African countries.
To confront these challenges, many governments have turned to the International Monetary Fund (IMF) for financial support. Nevertheless, this aid is not without consequences, as evidenced by the increasing debt burden weighing on the economies and sovereignty of these countries.
According to data from FDI Intelligence, the IMF has lent a sum of $149 billion to 94 countries around the world. This debt has increased greatly over the past three years, largely due to the combined effects of the COVID-19 pandemic and the conflict between Russia and Ukraine, which have strained the public finances of many states.
Among the primary beneficiaries of these IMF loans, five African countries rank in the world’s Top 10 borrowers. Argentina ranks first with a debt of $42.90 billion, closely followed by Egypt, Ukraine, Pakistan and Ecuador. Together, these five countries account for more than three-quarters of the entire debt owed to the IMF.
Egypt, in particular, stands out with an exceptional debt of $14.90 billion, making it the world’s second-largest debtor to the IMF. This debt is anticipated to increase further with a new $8 billion loan recently granted.
Despite efforts to mitigate the negative impacts of the pandemic and regional conflicts, Egypt continues to face major economic challenges, especially in the tourism and trade sectors linked to navigation in the Suez Canal.
Angola, Kenya, South Africa and Ghana are also among the IMF’s top African debtors, mirroring the broader trend of many countries on the continent taking on debt to cope with growing economic pressures. These IMF loans offer momentary relief, but they also raise questions regarding the long-term sustainability of external debt and its implications for the economic sovereignty of African countries.
Responsible debt management strategies and economic reforms sought at boosting growth and economic diversification in African countries are essential to ensure a sustainable future.
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