World Bank Report Reveals Africa's Heavy Debt Burden
The World Bank has recently published its financial commitment report for the 2024 fiscal year, revealing that 10 out of the 20 most indebted countries are African.
Africa Receives Largest Regional Envelope
Out of the $117.5 billion allocated by the World Bank between July 1, 2023, and June 30, 2024, $38 billion was destined for Sub-Saharan Africa, making it the largest regional envelope. This amount surpasses those allocated to other regions, such as Europe and Central Asia ($24.7 billion) and South Asia ($15.9 billion).
Funding for Key Sectors
These funds, provided in the form of loans, grants, equity investments, and guarantees, aim to support development projects in key sectors such as infrastructure, energy, and agriculture.
Top African Borrowers
Ethiopia tops the list of African borrowers, with $3.395 billion contracted from the International Development Association (IDA). Nigeria follows with $2.2 billion, Tanzania with $1.815 billion, Kenya with $1.654 billion, and Mozambique with $1.13 billion. Rounding out the list are Rwanda ($801 million), Ghana ($800 million), and Côte d'Ivoire ($757 million).
International Bank for Reconstruction and Development (IBRD) Lending
In terms of IBRD lending, Morocco and Nigeria are among the top borrowers, with $1.75 billion and $1.5 billion, respectively.
Debt Financing for Infrastructure and Education
The debt is primarily aimed at financing projects for infrastructure, strengthening educational systems, and expanding access to energy.
Concerns over Long-Term Debt Sustainability
This reliance on debt raises questions about the ability of countries to honor their long-term commitments, particularly in a global context marked by economic uncertainties.
