Morocco Ranks Fourth Among Africa's Most Indebted Countries

Morocco World

2 days ago

Doha – According to a recent report by the African Export-Import Bank (Afreximbank), Morocco ranks as the fourth most indebted economy in Africa.
The study, titled 'State of Play of Debt Burden in Africa and the Caribbean' and published on May 28, analyzes debt dynamics across Africa and the Caribbean with a focus on sovereign debt sustainability.
It reveals that six African countries account for 50% of the continent's external debt. South Africa leads with 13.1% of Africa's total external debt, followed by Egypt (12%), Nigeria (8.4%), Morocco (5.9%), Mozambique (5.3%), and Sudan (5.2%).
This high concentration of debt increases systemic risks. A financial crisis affecting any of these countries could have broader negative repercussions, potentially weakening cross-border financial flows, affecting trade, and altering investor sentiment toward African debt.
Morocco's external debt was estimated at $45.65 billion in 2023. While the country shows relative stability in its debt management, it remains exposed to global budgetary adjustments and fluctuations in international financial markets.
The country distinguishes itself with an import coverage exceeding three months, a crucial indicator for maintaining financial resilience.
Unlike 26 African countries expected to fall below this critical threshold in 2025, Morocco benefits from monetary strength that helps mitigate external shocks and better manage debt refinancing cycles.
According to Afreximbank, one of Morocco's major challenges remains its debt-to-exports ratio, which requires increased diversification of its markets and better valuation of its high value-added products.
The bank warns against excessive dependence on international financing, which could become constraining as credit access conditions tighten.
While Morocco does not exceed the critical threshold of 20% for the debt service-to-public revenue ratio, risks persist nonetheless.
Budgetary discipline, optimized taxation, and efficient allocation of public resources will be essential to limit the impact of the debt burden and ensure a financing trajectory aligned with its development ambitions.
$1,300 billion by the end of 2025
Africa's total external debt is expected to exceed $1,300 billion by the end of 2025. The report notes a slowdown in its growth after a period of rapid increase between 2016 and 2022.
This deceleration since 2022 stems from restricted access to global financial markets, higher credit costs, and a more cautious attitude from states concerned with preserving their budgetary viability in an environment marked by rising interest charges.
Projections indicate a slight easing of debt service pressures from 2025, due to reduced commercial borrowing, better inflation control, and expected monetary easing in major economies.
However, the report flags persistent fragility signals: fourteen countries will exceed the critical threshold of 180% debt-to-exports ratio, while twenty-five will cross the 20% mark for debt service as a proportion of public revenue.
Despite Africa's central public debt being expected to stabilize slightly above 55% of gross domestic product (GDP) by 2029—down from a peak of nearly 63% in 2020—the report projects modest improvement.
However, it cautions that more than 60% of African countries will exceed the 50% public debt-to-GDP threshold in 2025, a prudence level set by the IMF and World Bank's Debt Sustainability Framework.
For Morocco, although ranked among the continent's top debtors, its position remains relatively contained. However, its strong exposure to private creditors and dependence on external markets require vigilance.
Afreximbank encourages all African countries, including Morocco, to reduce their dependence on external debt through increased mobilization of internal resources, innovative financing, and strengthened budgetary discipline. Tags: external debtsIndebtednessMoroccan Economy