KEYIR NEWS - A recent report published by Business Insider Africa reveals that Ethiopia is now one of the top ten African countries with the highest debt to the International Monetary Fund (IMF), ranking seventh on the continent.
According to the publication, Ethiopia has borrowed $1.6 billion from the IMF since July 2024, a significant sum that highlights the country’s increasing reliance on international financial institutions amid ongoing economic reforms and challenges. This places Ethiopia behind six other African nations in terms of total debt owed to the IMF.
Egypt takes the lead as the African country with the highest IMF debt, with mounting obligations that are exerting immense pressure on its national budget. The report noted that Cairo’s growing debt burden has hindered its ability to implement key economic growth programmes, forcing the government to redirect funds toward debt servicing rather than development spending.
The list, compiled using IMF data, ranks the ten African countries with the highest outstanding IMF loans as follows: Egypt, Ivory Coast, Kenya, Angola, Ghana, Democratic Republic of Congo, Ethiopia, Tanzania, Cameroon, and Senegal.
The inclusion of Ethiopia in this ranking comes at a time when the country is facing foreign exchange shortages, high inflation, and budgetary constraints, challenges that have driven policymakers to seek external financial support. Analysts note that while IMF loans can offer temporary relief, they often come with stringent fiscal conditions that may complicate domestic policy implementation and social spending priorities.
Ethiopia’s $1.6 billion borrowing since last year represents part of a broader programme aimed at stabilising the macroeconomic environment and restructuring the country’s external debt. However, critics argue that such borrowing risks deepening the country’s long-term financial dependency, particularly if structural reforms are delayed or if economic growth fails to rebound sufficiently.
Elsewhere on the continent, countries like Kenya and Ghana continue to grapple with IMF debt amid efforts to manage public sector deficits and negotiate restructuring agreements. Ghana, for instance, has undertaken a series of austerity measures as part of its IMF-backed recovery programme, leading to widespread public discontent.
The IMF’s increased presence in African economies is reflective of the region’s post-COVID fiscal strain and the lingering impacts of global inflation, debt servicing costs, and currency depreciation. While some governments view IMF loans as necessary stop-gap measures, civil society organisations have warned that indebtedness without strong governance and transparency risks exacerbating inequality and stalling sustainable development.
The position in the top ten underscores the urgent need for domestic fiscal discipline, efficient public sector spending, and greater investment in productive sectors. Experts also suggest that the government should prioritise negotiations for debt relief and seek to strengthen alternative financing options, including concessional loans and public-private partnerships.
As African nations navigate a challenging global financial landscape, the IMF debt rankings serve as a stark reminder of the growing fiscal vulnerabilities facing many of the continent’s emerging economies.