A data-driven analysis revealing why low debt-to-GDP ratios mask a critical structural failure in revenue mobilization and toxic "r-g" dynamics across African economies.
The Sustainability Scorecard
We evaluated economies on three pillars: Stock (Debt/GDP), Flow (Primary Balance), and Dynamics (r-g).
Why is Nigeria Red?
Despite a "Green" Debt-to-GDP ratio (17.4%), Nigeria is flagged Red due to a critically negative Primary Balance (-6.5%) and a massive r-g gap (14.1). This confirms the crisis is about liquidity and revenue flow, not the debt stock itself.
Using K-Means clustering, we identified 3 distinct fiscal profiles.
Cluster 0: Vulnerable Baseline
Moderate Debt, High Interest Risk. (e.g., Nigeria, Togo)
Cluster 1: Crisis Zone
High Debt, Deep Deficits. (e.g., Ghana, Egypt)
Cluster 2: High Volatility
Moderate Debt, Unstable Growth. (e.g., South Africa)
Panel Regression isolated the country-specific impact on Primary Balance.
After controlling for GDP growth, interest rates, and debt levels, Nigeria performs 5.0% worse on Primary Balance than its peers.
"This residual is the quantifiable cost of revenue leakage, weak tax administration, and structural inefficiency. It proves the crisis is structural, not cyclical."
Projecting the trajectory for a "Vulnerable Baseline" country (Cluster 0).
Interpretation: The "Policy Gap" to achieve stability is a 164% improvement in Primary Balance—impossible without massive structural reform.
Target 5-10% of GDP in non-oil revenue via digital VAT compliance and property tax reform.
Borrowing must be ring-fenced for SDG 9 (Infrastructure) capital projects to boost growth ('g') above rates ('r').
Adopt governance practices from Cluster 1 (Fiscal Vanguards) to reduce leakage and improve transparency.