Africa's Debt Landscape: Scope for Sustainability

The document examines the rising debt accumulation in Africa since 2010, noting a shift from traditional creditors to emerging economies like China and private bondholders. It analyzes how the 2008 financial crisis and COVID-19 pandemic exacerbated vulnerabilities, and argues that existing relief initiatives like the DSSI and Common Framework are insufficient because they often exclude private creditors and lack binding legal frameworks. The authors advocate for a statutory Sovereign Debt Restructuring mechanism and the adoption of UN-led principles to ensure transparency and fairness.

• African debt levels grew by nearly 140% between 2009 and 2019, reaching USD 841 billion, following the debt cancellations of the early 2000s.
• There has been a significant shift in the composition of African debt, with a decrease in the share held by traditional agents like the Paris Club, World Bank, African Development Bank, and IMF, and an increase in debt owed to China, Arab Gulf States, and private creditors via Eurobonds.
• The COVID-19 pandemic severely impacted African economies, causing the first recession in half a century for Sub-Saharan Africa with a GDP decline of up to 2.1% in 2020 and an expected increase in the average debt-to-GDP ratio to over 70% in 2021.
• Infrastructure development, often driven by the Sustainable Development Goals (SDGs) and the Belt and Road Initiative, has led to increased borrowing and the use of Public-Private-Partnerships (PPPs), which the document describes as expensive and risky due to poor regulatory frameworks.
• Existing debt relief initiatives are deemed insufficient; for example, the Debt Service Suspension Initiative (DSSI) failed to include private creditors and only covered about 10% of total external debt service for eligible countries in 2020.
• The allocation of Special Drawing Rights (SDR) in 2021 was disproportionately distributed, with high-income countries receiving USD 434 billion compared to approximately USD 34 billion for African countries.
• Credit rating agency downgrades during the pandemic have increased borrowing costs and may discourage African countries from seeking necessary debt restructuring.
• The authors propose the establishment of a statutory Sovereign Debt Restructuring mechanism and a Sovereign Debt Tribunal to make debt restructuring binding and enforceable, citing Belgium's Anti-Vulture Laws as a positive example of curtailing vulture fund litigation.

APA

Sokpoh, A., Chirikure, N., & Braganza, J. R. (2022). Africa's Debt Landscape: Scope for Sustainability. Africa Policy Research Institute. https://afripoli.org/africas-debt-landscape-scope-for-sustainability

Chicago

Sokpoh, Aurore, Nora Chirikure, and Jason Rosario Braganza. Africa's Debt Landscape: Scope for Sustainability. Africa Policy Research Institute, 2022. https://afripoli.org/africas-debt-landscape-scope-for-sustainability.

Wikipedia

{{cite report |last1=Sokpoh |first1=Aurore |last2=Chirikure |first2=Nora |last3=Braganza |first3=Jason Rosario |title=Africa's Debt Landscape: Scope for Sustainability |publisher=Africa Policy Research Institute |date=3 March 2022 |url=https://afripoli.org/africas-debt-landscape-scope-for-sustainability |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sokpoh2022africas, author = {Sokpoh, Aurore and Chirikure, Nora and Braganza, Jason Rosario}, title = {{Africa's Debt Landscape: Scope for Sustainability}}, institution = {Africa Policy Research Institute}, year = {2022}, month = mar, url = {https://afripoli.org/africas-debt-landscape-scope-for-sustainability}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }