By: Juliet Yamah Dickson, ID #: GP-94901, Candidate of Master’s Degree in international Relations / School of Global Affairs / Cuttington University School of Graduate and Professional Studies
Introduction
Public debt has long been a central concern in both economic theory and policy practice, serving as a key indicator of a nation’s fiscal health and its capacity to sustain growth. The debt-to-GDP ratio, which measures the size of a country’s public debt relative to its economic output, is widely used to assess whether a government’s borrowing is sustainable. A high ratio is normally interpreted as potential fiscal strain, while a low ratio is generally interpreted as a sign of financial stability. Yet, the meaning of this indicator is far from uniform across different contexts. Advanced economies with reserve currencies sustain high debt levels without immediate instability, while developing economies may struggle even with relatively modest debt burdens.
This paper undertakes a comparative analysis of debt-to-GDP ratios among two sets of countries: the five permanent members of the United Nations Security Council (United States, United Kingdom, France, Russia, and China) plus Japan, and five African countries—Liberia, Nigeria, South Africa, Ghana, and Kenya (Debt to GDP Ratio Comparison 2000 2024 Trends – Infographic Website, 2024). The inclusion of Japan alongside the P5 reflects its unique position as a major global economy with one of the highest debt ratios in the world. The African countries selected represent diverse economic profiles: resource-dependent economies (Nigeria, Liberia), middle-income economies with regional influence (South Africa, Kenya), and a country facing acute debt distress (Ghana).
By comparing these groups, the study seeks to answer two critical questions. First, do countries with low debt-to-GDP ratios actually enjoy the expected financial stability, or do they find themselves without benefits expected of low debt? Second, if debt-to-GDP were equally important across all contexts, which countries would be expected to assist others in maintaining fiscal sustainability? These questions are particularly relevant in a globalized economy where debt crises in one region can have ripple effects across the world, and where international cooperation is often necessary to stabilize vulnerable economies.
The analysis highlights the paradox that while African countries generally maintain lower debt ratios than advanced economies, they often face greater instability due to limited fiscal space, weaker institutions, and external shocks. Conversely, advanced economies sustain high debt levels because of their monetary sovereignty, and access to global capital markets. This contrast underscores the need to interpret debt-to-GDP ratios not in isolation but within broader political, institutional, and economic contexts.
Debt-to-GDP Ratios (2025 Estimates)
Country
Debt-to-GDP Ratio (%)
Japan
230
United States
122
France
111
United Kingdom
98
China
83
Russia
~20–25
Liberia
51
Nigeria
39
South Africa
72
Ghana
85
Kenya
70
Sources: IMF World Economic Outlook (2025), World Population Review (2025), Trading Economics (2025)
Analysis
- Financial Instability despite Low Debt Ratios
● Nigeria (39%) has a relatively low debt ratio compared to advanced economies. However, it is negatively affected by currency volatility, limited fiscal space, and increasing reliance on external borrowing, which undermines financial stability (Atuma & Atuma, 2024).
● Liberia (51%) also has a relatively low debt ratio compared to advanced economies. However, it experiences limited fiscal space and aid dependence, instead of financial stability (Festus, 2025).m
● .
- Financial Instability and Moderate Debt Ratios
● South Africa (72%) and Ghana (85%) have moderate debt ratios and experience instability coupled with weak growth and high interest costs. These nations also have moderate political stability.
- Financial Stability and Extremely High Debt Ratios
● Japan (230%) demonstrates that high debt is not necessarily associated with a destabilized economy. Japan’s debt is largely held by domestic investors, insulating it from the external pressures which many African nations experience.
- Debt-to-GDP as a Universal Measure of Responsibility
If debt-to-GDP were equally important across all countries, African nations economies with lower debt to GDP ratios would be expected to assist economies with wors :
● United States, United Kingdom, France, and Japan have higher debt ratios but also greater access to global capital markets, reserve currencies, and control of the institutions that manage global finance. As a result of these features, the African countries are constrained to continue to be disadvantaged in fiscal matters and are in need of debt relief, concessional loans, or investment.
● Russia, with relatively low debt (~20–25%), has fiscal space but faces constraints in using mainstream multilateral financial institutions due to sanctions. It is at the center of efforts to create alternatives such as the BRICS Bank, currency swaps and non-dollar denominated payment solutions.
● Japan, despite its high debt, remains a major donor due to its large economy. However, it has slowing growth and a demographic crisis as it has the world’s fastest ageing population and one of the fastest shrinking.
● Among African countries, Nigeria and South Africa could provide regional support, but their own fiscal challenges limit their capacity. Nigeria has a volatile currency, while South Africa experiences some of the worst inequality in the world
Conclusion
The comparative analysis of debt-to-GDP ratios among the permanent members of the UN Security Council, Japan, and selected African countries reveals a paradox at the heart of global fiscal sustainability. Visibly, African countries such as Nigeria (39%) and Liberia (51%) maintain relatively low debt burdens compared to advanced economies like Japan (230%) and the United States (122%). Yet, the lived realities of financial stability diverge sharply. For African states, low debt ratios do not automatically translate into prosperity. Limited access to international capital markets, and vulnerability to external shocks—erode the stabilizing effect that low debt might otherwise confer. In contrast, advanced economies sustain high debt levels without immediate crisis because of dominance of the multilateral institutions that assign credibility, monetary sovereignty and the global demand for their currencies.
Ultimately, the comparison demonstrates that advantages granted by debt-to-GDP ratios must be interpreted within context. For advanced economies, high debt is often manageable; for developing economies, even moderate debt can be destabilizing. This asymmetry calls for a more nuanced global approach to debt management—one that recognizes the structural disadvantages faced by African economies and the responsibility of advanced economies to remove external barriers that encumber them. Liberia’s case, in particular, illustrates the fragility of fiscal stability in post-conflict states, where international financial watchdogs institute austerity as an economic remedy, while being silent on debt-funded quantitative easing being applied by nations which already have the largest debt burdens.
In conclusion, debt-to-GDP ratios remain a useful but incomplete measure of fiscal health. Without such cooperation, the gap between numerical debt indicators and actual financial stability will persist, leaving countries like Liberia and Ghana exposed to recurrent crises despite favorable debt ratios.
References
● Atuma, P., & Atuma, P. (2024, May 31). How exchange rate volatility is crippling Nigerian businesses. Nairametrics. https://nairametrics.com/2024/05/31/how-exchange-rate-volatility-is-crippling-nigerian-businesses/
● Debt to GDP Ratio Comparison 2000 2024 Trends – Infographic website. (2024, September 19). Infographic Website. https://infographicsite.com/infographic/debt-to-gdp-ratio-comparison-2000-2024/
● Festus. (2025, March 3). https://oraclenewsdaily.com/2025/03/03/liberias-dependency-on-foreign-aid-a-shameful-reality-that-must-end/
● International Monetary Fund (2025). World Economic Outlook: Global Debt Monitor.
● World Population Review (2025). Debt-to-GDP Ratio by Country.
● Trading Economics (2025). Government Debt to GDP – Africa.
● Visual Capitalist (2025). Mapped: Government Debt to GDP by Country.
Note: This course is taught by Dr. Akia P. Glay, with cover provided by Cllr. Phil Tarpeh Dixon.
About the Author:
Juliet Yamah Dickson is a business and public service professional with academic training in Business Administration, Accounting, and International Relations. She holds an Associate of Arts in Business Administration and a Certificate in Secretarial Science from Leigh Sherman Community College, a Bachelor of Business Administration in Accounting from the United Methodist University, and a Post Graduate Diploma in International Relations and Public Diplomacy from the Gabriel L. Dennis Foreign Service Institute. Professionally, she has served at the Ministry of Agriculture and the Central Bank of Liberia, where she currently works as a Senior Operations Officer, providing administrative, operational, and protocol support for high-level functions.
