Debt in Africa

Total external debt

Levels of debt in developing countries in Africa have varied over recent years. As the chart below shows, nominal levels of debt in both sub-Saharan Africa and the Middle East and North Africa began to sharply increase in the early 2000s, and the rate has not slowed in recent years.

As we explain in the Commons Library’s research briefing Debt relief for low-income countries, debt is not necessarily a bad thing in and of itself, and can help with economic development. The increase in debt in the early 2000s was indeed accompanied by higher economic development in Africa. This meant that as a proportion of these countries’ national income, debt actually decreased over the early 2000s, and only began to increase again from the late 2010s onwards. As of 2010, developing countries in sub-Saharan Africa had a total external stock of debt of about US$790 billion, or around 43% of national income.

The cost of servicing this debt, however, has also increased. As the chart below shows, developing countries in sub-Saharan Africa paid about US$84 billion in debt servicing in 2021, with countries in the Middle East and North Africa paying a further US$45 billion.

According to the World Bank’s Debt Sustainability Analysis, as of the end of September 2023 there were nine African countries in ‘debt distress’ (unable to fulfil their repayment requirements). A further 15 African countries were at high risk of debt distress, with another 14 at moderate risk.

Debt owed to the UK

As of 31 August 2022, countries in Africa owed a total of £2,758 million to the UK. This accounts for 56% of all debt owed to the UK by foreign countries. The total levels of debt can be broken down by country as shown below.

This shows that Sudan has the highest level of debt to the UK, at £904 million. It also shows that the vast majority of outstanding debt exposure is accounted for by UK Export Finance (the UK’s export credit agency, which provides finance and insurance to help UK exporters).

Aid spending on debt

Only a relatively small amount of debt is still owed to the UK by African countries, which means that aid spending on relieving this debt is also low. Between 2014 and 2022, the only UK aid spending on debt in Africa was £44 million of debt forgiveness for Somalia in 2020 under the Heavily Indebted Poor Countries Initiative.

The UK Government argues that its small debt portfolio means that it can play only a “limited role” in debt restructuring in lower-income countries, and instead helps to coordinate debt relief globally. UK government actions on debt relief is explained further in section 5 of the Library research briefing Debt relief for low-income countries.