The Changing Nature of Debt in Africa

The paper argues that Africa faces unsustainable public debt levels due to a shift toward private and non-traditional creditors, which increases borrowing costs and crowds out climate and social investments. It concludes that current G20 and Common Framework relief mechanisms are insufficient and calls for a fundamental overhaul of the global financial system.

• Many African countries are experiencing unsustainable public debt levels despite two decades of large-scale relief initiatives, which suggests that the current global financial architecture is unable to resolve solvency and liquidity challenges in developing nations.
• The composition of debt has shifted toward non-traditional lenders and private creditors, leading to higher borrowing costs and a debt service burden that reduces investment in climate resilience and social services.
• Existing global debt relief mechanisms, specifically the Common Framework and the G20 Debt Service Suspension Initiative (DSSI), have not sufficiently addressed the long-term debt issues facing Africa, necessitating a fundamental overhaul of the global financial system.

APA

Owusu-Baafi, S. (2024). The Changing Nature of Debt in Africa. African Center for Economic Transformation. https://acetforafrica.org/research-and-analysis/insights-ideas/the-changing-nature-of-debt-in-africa/

Chicago

Owusu-Baafi, Samuel. The Changing Nature of Debt in Africa. African Center for Economic Transformation, 2024. https://acetforafrica.org/research-and-analysis/insights-ideas/the-changing-nature-of-debt-in-africa/.

Wikipedia

{{cite report |last1=Owusu-Baafi |first1=Samuel |title=The Changing Nature of Debt in Africa |publisher=African Center for Economic Transformation |date=19 November 2024 |url=https://acetforafrica.org/research-and-analysis/insights-ideas/the-changing-nature-of-debt-in-africa/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{owusubaafi2024changing, author = {Owusu-Baafi, Samuel}, title = {{The Changing Nature of Debt in Africa}}, institution = {African Center for Economic Transformation}, year = {2024}, month = nov, url = {https://acetforafrica.org/research-and-analysis/insights-ideas/the-changing-nature-of-debt-in-africa/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }