Nigeria, Other African Countries At Risk Of Debt Distress, IMF Warns

The International Monetary Fund has said that 40% of African countries, about 20 countries, may not be able to pay their debts and at risk of becoming stuck in debt trap.

This was disclosed by the newly appointed Managing Director of the organisation, Kristalina Georgieva in an interview with Bloomberg TV from Berlin.

According to the IMF, this debt trap is as a result of these countries not being able to service their debts to enhance economic development.

Nigeria, with a total foreign debt portfolio of over $27billion as at June, is among nearly 20 fellow African countries with rising debt profiles. Other countries include Ghana, Cameroun, Zambia, Angola and Ethiopia.

Georgieva, however, said though the fund sometimes gets worried about the debt cases, they most times trash the worries in the bin because projections have shown investment to pay off over time.

“Africa is a continent of opportunities and what we are looking for is for this opportunity to be harnessed to the maximum. It is also a continent with many troubles so we have to be mindful of these risks especially security risks,” she said.

She noted that debt is not a thing for a country but it becomes bad when it goes into the wrong things and a speed that the economy cannot handle, adding that countries that are experiencing higher growth rate have done so by borrowing for investments that can generate growth.

Meanwhile, Georgieva said the IMF will hold a “concentrated” meeting with African leaders in December to discuss debt sustainability.