THE AFRICAN BORROWING CHARTER

The African Borrowing Charter (2018), published by the African Forum and Network on Debt and Development (AFRODAD), is a policy framework designed to prevent unsustainable public debt accumulation in Africa. It establishes guiding principles for debt contraction, management, and transparency, while proposing a robust legal framework and a Fiscal Responsibility Act to ensure that borrowing supports inclusive development and protects future generations.

• The Charter establishes nine guiding principles for public debt, emphasizing that African governments act as agents of the State and must protect citizens' interests. Key requirements include parliamentary approval for all public debt and guarantees, the anchoring of debt use in constitutionalism and the rule of law, and the obligation to disclose financing terms to the public.
• The document highlights a historical debt crisis in Africa during the 1970s, 1980s, and 1990s, where external debt as a percentage of GDP rose from 13% in 1970 to 112.4% in 1990. Total debt stock increased from US$ 9.9 billion in 1970 to US$ 271.9 billion by 1990, leading to fiscal instability and a decline in social indicators.
• Since the 2008 global financial crisis, there has been a shift toward market-based financial instruments due to declining Official Development Assistance (ODA) and limited concessional finance. This includes an increase in international sovereign bonds, with sub-Saharan Africa's bonds issued to private creditors rising from $18.3 billion in 2008 to $77.5 billion in 2016.
• The Charter identifies specific risks associated with Eurobonds, including the fact that repayment occurs at maturity rather than being amortized, and foreign exchange risks because bonds are typically denominated in US dollars. Additionally, Eurobonds are noted as being more difficult to restructure due to the high number of creditors involved.
• To ensure sustainable debt, the Charter proposes a legal framework where the Minister of Finance must report actual borrowings monthly in the Government Gazette and to Parliament every six months. It mandates that loans be used solely for their intended purpose unless Parliament votes otherwise and restricts borrowing primarily to funding capital developments.
• The Charter recommends the establishment of a Public Debt Management Office as a corporate body. This office would be responsible for preparing Medium Term Debt Management Strategies, publishing annual borrowing plans, conducting annual debt sustainability analyses, and maintaining a reliable database of all government loans and guarantees.
• The document calls for the enactment of a Fiscal Responsibility Act to maintain transparency and long-term sustainability of public finance. This Act would implement a three-year Medium Term Expenditure Framework and establish a debt rule limiting total public debt to a maximum of 70% of GDP in any given year (noting that WEMU members adopted a 50% limit).
• The Charter emphasizes the role of civil society, stating that organizations and movements have a legitimate right to engage in public debt issues through research and advocacy, as they are directly affected by the debt that citizens must ultimately repay.

APA

African Forum and Network on Debt and Development (2018). THE AFRICAN BORROWING CHARTER. https://afrodad.org/sites/default/files/advocacy-documents/AFRODAD-COMBINED-CHARTER.pdf

Chicago

African Forum and Network on Debt and Development. THE AFRICAN BORROWING CHARTER. 2018. https://afrodad.org/sites/default/files/advocacy-documents/AFRODAD-COMBINED-CHARTER.pdf.

Wikipedia

{{cite report |author=African Forum and Network on Debt and Development |title=THE AFRICAN BORROWING CHARTER |date=2018 |url=https://afrodad.org/sites/default/files/advocacy-documents/AFRODAD-COMBINED-CHARTER.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{africanforumandnetworkondebtanddevelopment2018african, author = {{African Forum and Network on Debt and Development}}, title = {{THE AFRICAN BORROWING CHARTER}}, institution = {African Forum and Network on Debt and Development}, year = {2018}, url = {https://afrodad.org/sites/default/files/advocacy-documents/AFRODAD-COMBINED-CHARTER.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }