Africa's Debt Landscape: Scope for Sustainability

This policy brief by the Africa Policy Research Institute examines the evolving nature of sovereign debt in Africa, highlighting a shift from traditional multilateral creditors to private bondholders and emerging economies like China. It argues that current debt relief mechanisms are insufficient because they lack statutory, human rights-based frameworks and fail to compel the participation of private creditors, leaving African nations vulnerable to economic shocks like the COVID-19 pandemic.

• African public debt increased by nearly 140% between 2009 and 2019, reaching USD 841 billion. This growth was accompanied by a shift in debt composition, with increasing shares owed to private creditors via Eurobonds and emerging economies, specifically China.
• Debt servicing consumes a significant portion of national revenues for many African countries. In 2019, Angola spent approximately 43% of its total revenue on debt servicing, while Ghana spent 39%.
• The COVID-19 pandemic severely impacted African economies, leading to the region's first recession in 50 years with a GDP decline of up to 2.1% in 2020. The average debt-to-GDP ratio was projected to rise from 60% in 2019 to over 70% in 2021.
• China has been the primary bilateral actor in African infrastructure financing, lending approximately USD 143 billion between 2000 and 2017. This represents 15% of infrastructure financing, significantly higher than the 3% provided by multilateral development banks.
• Public-Private-Partnerships (PPPs) used for infrastructure are described as expensive and risky due to poor management, lack of transparency, and inadequate regulatory frameworks, which can lead to 'White Elephants' and debt defaults, as seen in Zambia.
• Existing debt relief initiatives are often inadequate because they exclude private creditors. For example, the Debt Service Suspension Initiative (DSSI) only covered about 10% of eligible countries' total external debt service for 2020 and failed to include private lenders.
• The allocation of Special Drawing Rights (SDRs) in 2021 was uneven; of the USD 650 billion total, only about USD 34 billion went to African countries, while USD 434 billion was reserved for high-income countries.
• The document advocates for a statutory, human rights-based sovereign debt restructuring mechanism to replace current contractual methods like Collective Clauses Actions (CACs), which are deemed insufficient for coordinating creditors and preventing '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} }