Nigeria Missing In The 20 Countries With Highest Debt Profile

Editor

2 years ago

BY DAYO ADESULU

In spite of Nigeria’s rising debt profile nationally and internationally, the most populous black African country is excluded from the twenty countries with the highest debt in the world.

As of March 2022, Nigeria’s stock debt stock stood at N41.60 trillion, according to the Debt Management Office.

Credible News findings revealed that the N41.60 trillion represented the domestic and external debt stocks of the Federal Government of Nigeria, the 36 state governments and the Federal Capital Territory.

According to data posted by the DMO, the federal government’s total domestic debt as of March 31, 2022, stood at N20.144 trillion ($20,144,027,724,703).

The breakdown of the debts by region is as follows: North East: $177,150,566 North West: $847,935,824 North Central: $3,480,761,166 South West: 2,730,199,816 South East: 474,222,501 South-South: $4,092,399,286.

The Director-General of the Debt Management Office (DMO), Mrs. Patience Oniha September 1 confirmed Nigeria’s Debt rising profile.

Oniha, during her appearance at the ongoing engagement on the 2023 – 2025 Medium Term Expenditure Framework (MTEF) and Fiscal Policy Paper held by the House of Representatives Committee on Finance Thursday, attributed Nigeria’s high debt profile to lack of revenues and approval of the annual budget with a deficit by the National Assembly which increased the debt stock of the country.

She said: “As at December 2020, the debt stock of the federal, state governments and the Federal Capital Territory was N32.92 trillion. By December 2021, it was N39.556 trillion. As at March of this year, we publish quarterly, it was N41.6 trillion. On the average, federal government is owing about 85 per cent of the total.

“We have been running deficit budget for many years and each time you approve a budget with a deficit, by the time we raise that money because when you approve it, it is giving us a mandate, authority to borrow, it will reflect in the debt stock, so debt stock will increase. Also note that states are also borrowing. So we add their own. They also have laws governing their borrowings and as debt stock increases so does debt service.

“Until the issues of personnel, overhead and capital expenditure are properly addressed in the budget, borrowing would not stop.”

Zambia: 118.7% of GDP

At the end of 2020, Zambia became the first African state to default on its payments to creditors since the start of the COVID-19 pandemic. Former President Edgar Lungu has been criticized for borrowing heavily and clandestinely, particularly from China, to finance his many infrastructure projects. The continent’s second-largest copper producer owed $12 billion as of September 2021.

Bhutan: 123.4% of GDP

This small country, located between India and China, already had a public debt of 120.7% of GDP in 2020, largely due to declining tourism revenues. Having one of the world’s least developed economies didn’t help either. A recent agreement to export hydroelectricity to India and implement a new tourism policy targeting its neighbours could help Bhutan reduce its debt in 2022.

Mozambique: 125.3% of GDP

Mozambique is one of the poorest and most indebted countries in the world, mainly due to scandals surrounding debt disclosures. The government seemed to be on track to a balanced economy before the COVID-19 pandemic, but several recent cyclones and jihadist attacks have interrupted a major gas project.

Bahrain: 129.4% of GDP

Bahrain enjoys the most diversified economy in the Cooperation Council for the Arab States of the Gulf (GCC) but remains subject to oil price fluctuations. The government is now counting on the manufacturing and tourism sectors to get the country back on track toward a balanced budget.

Singapore: 129.5% of GDP

Although Singapore’s economy is doing quite well, thanks in part to its status as a commercial hub and the government’s good fiscal management, the city-state recorded negative GDP growth of -5.4% in 2020. The IMF is predicting a rebound, though, to 5% in 2021 and stabilization at 3.2% in 2022, depending on the post-pandemic global economic recovery.

Aruba: 130.3% of GDP

The COVID-19 pandemic has severely affected this Dutch island’s tourism-dependent economy. Despite the government’s responsiveness and an easing of its central bank’s monetary policies, Aruba is currently experiencing the biggest recession in its history.

Portugal: 131.4% of GDP

Despite Portugal’s tourism challenges, caused by the pandemic, Moody’s upgraded the country’s rating by one notch in September 2021. The rating agency believes that Portugal’s “debt burden will decline in the coming years due to stronger economic growth and improved effectiveness of fiscal policymaking.”

United States: 132.8% of GDP

By September 2021, the United States was approaching the maximum debt ceiling, set by Congress, of $28.4 trillion dollars. If that limit is surpassed and the Senate does not raise the ceiling, the U.S. government will find itself in default for the first time in history.

Belize: 134.6% of GDP

Belize is one of the most indebted countries in the world, largely because of its geographic location and open borders that make it vulnerable to trafficking and illegal immigration. The country has also experienced a significant decline in tourism, an industry on which it greatly depends, due to the COVID-19 pandemic. What’s more, Belize also has a reputation for being a bad payer after defaulting on its debt several times, most recently in 2020 and 2021.

Cabo Verde: 137.6% of GDP

Cabo Verde’s economy has been severely affected by the COVID-19 pandemic, particularly due to travel restrictions and national lockdown measures. Declining incomes and the government’s implementation of social protection and employability programs, as well as a fiscal and monetary stimulus, have sharply increased the country’s deficit.

Maldives: 139.7% of GDP

The Maldives is normally a high-end tourists’ destination, but saw its GDP growth decline by 32.2% in 2020. The government is facing several challenges, including the diversification of its large tourism- and fishing-based economy, the reform of public finances, and the elimination of corruption and drugs.

Barbados: 143% of GDP

Barbados depends greatly upon revenues generated by tourism and overseas banking services. The country has faced serious economic challenges since the onset of the COVID-19 pandemic. Despite borrowing approximately $1.2 billion in the fiscal year 2020-2021, the decline in its GDP contributed significantly to increasing its debt-to-GDP ratio.

Italy: 157.1% of GDP

Severely affected by the COVID-19 pandemic, the Italian government had no choice but to implement stimulus measures. The country is also counting on an ambitious investment plan, totalling 222.1 billion euros over six years, targeting digitization, ecological transition, and infrastructure.

Suriname: 157.4% of GDP

To mitigate the impact of the COVID-19 pandemic, the government of Suriname introduced fiscal measures totalling 4.4% of GDP, including increased spending on health, a boost in economic assistance to households and businesses, and higher payments to pensions, those with disabilities, children, and vulnerable populations.

Eritrea: 175.6% of GDP

Eritrea was only slightly affected by the COVID-19 pandemic in terms of human casualties but has suffered greatly economically. The mining sector, for example, has experienced a decline in global demand for raw materials, and lockdown measures have hurt economic growth.

Greece: 210.1% of GDP

Despite being released from 100 billion euros of debt in recent years, Greece is still Europe’s most indebted country. That said, the situation seems to be improving. While tourism revenues have dropped considerably due to the COVID-19 pandemic, S&P Global Ratings has upgraded Greece’s score to BB, thanks in particular to improved governance and debt-reduction measures.

Sudan: 211.7% of GDP

Although recently revoked, Sudan’s listing on the U.S. blacklist of state sponsors of terrorism prevented it from qualifying for debt relief, but the country may eventually prevail provided it qualifies for the Heavily Indebted Poor Countries (HIPC) initiative within three years. The IMF noted that the government’s successful reforms “have laid the groundwork for fostering inclusive economic growth and addressing the needs of the most vulnerable people.”

Japan: 256.5% of GDP

Just because Japan has one of the highest debt-to-GDP ratios every year doesn’t mean the country is on the verge of a crisis. Why? Simply put, interest rates on the debt are almost zero, and the debt is largely held by the Japanese people themselves.

Venezuela 390% of GDP

According to Coface, Venezuela’s public debt is expected to reach 390% in 2021. In addition to the numerous government-imposed measures to mitigate the impact of the COVID-19 pandemic, the country is experiencing low purchasing power, increasing poverty, and a critically damaged health system. Add to that Venezuela’s 30% drop in GDP in 2020, likely due to its vulnerability to oil price fluctuations.

Lebanon: % of GDP unknown (170% of GDP in 2020)

While the IMF has not yet revealed Lebanon’s debt-to-GDP ratio, the country is experiencing an economic and humanitarian crisis of the such magnitude that it has unfortunately made the top spot on this list. Lebanon has been in default since March 2020 and suffered an explosion the same year that devastated the port of Beirut and killed 214 people. The country has since been without a stable government and, therefore, does not qualify for international aid. A large part of the population is struggling to find enough food, suffers from a shortage of medicine and fuel, and must endure daily power cuts.