Morocco among Africa’s top debtors, faces growing external risks

Wednesday 11 June 2025 - 11:50

By: Dakir Madiha

Morocco among Africa’s top debtors, faces growing external risks

Morocco has emerged as the fourth most indebted country in Africa, with external debt reaching $45.65 billion in 2023, according to a report by the African Export-Import Bank (Afreximbank). The report, titled “State of Play of Debt Burden in Africa and the Caribbean," highlights Morocco’s relatively stable position in debt management but emphasizes its vulnerabilities to global financial shifts and reliance on external markets.

Morocco’s debt profile and ranking

The report reveals that six African countries account for half of the continent’s external debt, with South Africa leading at 13.1%, followed by Egypt (12%), Nigeria (8.4%), Morocco (5.9%), Mozambique (5.3%), and Sudan (5.2%). This concentration of debt poses systemic risks, as financial instability in any of these nations could ripple across borders, affecting regional trade and investor confidence.

Morocco’s external debt, while contained, reflects its exposure to private creditors and sensitivity to global market adjustments. The country’s debt-to-exports ratio remains a significant challenge, underscoring the need for market diversification and enhanced valuation of high value-added products.

Financial resilience and challenges

Morocco demonstrates resilience with an import coverage exceeding three months—a critical benchmark for financial stability. Unlike 26 African countries expected to fall below this threshold in 2025, Morocco’s monetary strength helps mitigate external shocks and manage debt refinancing cycles effectively.

However, Afreximbank warns against over-reliance on international financing, particularly as global credit conditions tighten. The report suggests that Morocco’s debt service-to-public revenue ratio, though below the critical 20% threshold, requires continuous budgetary discipline and optimized resource allocation to limit the burden.

Broader African debt trends

Africa’s total external debt is projected to surpass $1.3 trillion by the end of 2025, though the pace of growth has slowed since 2022. This deceleration is attributed to restricted access to financial markets, rising credit costs, and tightened fiscal policies.

Despite these trends, the continent faces ongoing fragility. Fourteen African nations are expected to exceed the critical 180% debt-to-exports ratio, and 25 countries will surpass the 20% debt service-to-revenue threshold. By 2029, Africa’s public debt-to-GDP ratio is forecast to stabilize at just above 55%, down from a peak of nearly 63% in 2020, but over 60% of African countries will still exceed the 50% debt-to-GDP prudence level set by international financial institutions.

Recommendations for Morocco

The report urges Morocco and other African nations to reduce reliance on external debt by mobilizing domestic resources, exploring innovative financing mechanisms, and maintaining strict fiscal discipline. While Morocco’s position is relatively stable, its strong exposure to private creditors and dependence on international markets demands heightened vigilance to ensure sustainable growth and achieve its development ambitions.