Debt is a significant problem for many countries globally, and Ethiopia is no exception. The country’s total public debt was estimated at $21.8 billion in 2017, equivalent to about 50% of the GDP. This high level of debt is a significant challenge for the Ethiopian government and could lead to financial instability in the future. The National Debt is the total amount of money owed by the Ethiopian federal government.
The national debt causes are many and varied but can be generally divided into two categories: spending and revenue. Federal spending has consistently outpaced federal revenue for decades, resulting in ever-increasing debt levels. Additionally, the national debt is affected by economic conditions, such as recessions and inflation, and political decisions, such as military engagements.
The Ethiopian government has over $19 billion, making it the third most indebted country in Africa. Most of this debt is owed to China, which has lent Ethiopia more than $12 billion in recent years. In 2016, Ethiopia agreed to a new loan from China worth $1.2 billion to finance infrastructure projects.
The figures refer to the whole country and include the state’s debts, the communities, the municipalities, and the social insurance. In 2016, the national debt of Ethiopia amounted to approximately 53.24 percent of the GDP.
Ethiopian National Debt
|Year||National debt in relation GDP|