Public Debt in North Africa Reaches Critical Levels
According to a report published by the United Nations Economic Commission for Africa (ECA), the average debt-to-GDP ratio in the sub-region has increased from 79.7% in 2019 to 88.4% in 2023. This rapid rise is attributed to the combined effects of the COVID-19 pandemic, the conflict between Russia and Ukraine, regional tensions in Sudan and Gaza, and the growing impacts of climate change.
Increased Fiscal Pressure
North African governments are now facing increased fiscal pressure, forcing them to redirect resources towards debt repayment, often at the expense of social programs and public investments. The ECA, through its policy brief titled "Debt Management and Sustainable Finance in North Africa," published in August 2025, warns of the risks of a vicious cycle between debt, slowed growth, and climate vulnerability.
Tunisia: A Country Highly Exposed to Rising Debt
Tunisia is among the countries most exposed to the surge in debt. According to the ECA, the public debt-to-GDP ratio has increased from 67.3% in 2019 to 83.7% in 2024. More than half of this debt is now contracted domestically. In 2015, external debt accounted for 51.23% of GDP, compared to 33.29% for domestic debt. By 2022, the trend had reversed: domestic debt (48.36%) had surpassed external debt (46.32%).
The Cost of Increased Dependence on Domestic Debt
This increased dependence on domestic debt is due to the difficulty of accessing international financing. However, it comes at a cost: domestic loans are often associated with shorter maturities and higher interest rates, which heavily burden public finances. Debt servicing absorbs a growing share of the national budget, reducing the space available for education, health, or infrastructure expenditures.
A Region with Contrasting Trajectories
In the region, Algeria, Mauritania, and Morocco have managed to stabilize or reduce their debt levels. Algeria is cited by the ECA as an example of good public debt management. In contrast, Tunisia, Egypt, and Sudan are experiencing acute budgetary tensions, exacerbated by persistent inflation and a weakening of foreign exchange reserves.
The Growing Link between Debt and Climate
The study also highlights the growing link between debt and climate: natural disasters, drought, and weather variability increase the financial vulnerability of states, forcing them to resort to more debt to finance adaptation measures.
Rethinking Solutions
To reverse the trend, the ECA recommends strengthening domestic debt management, increasing budget transparency, and promoting local currency financing to limit the risks associated with exchange rate volatility. It also calls for attracting more foreign investment and developing innovative financial instruments, such as "debt-for-climate" swaps, which allow for the conversion of part of the debt into investments for climate resilience.
