THE AFRICAN BORROWING CHARTER

The African Borrowing Charter provides a framework for African states to balance public debt with the need for inclusive growth and public service delivery. It emphasizes transparency, parliamentary oversight, and the establishment of robust legal frameworks to prevent a recurrence of the debt crises seen in the 1970s-1990s. The Charter advocates for the creation of Public Debt Management Offices and the enactment of Fiscal Responsibility Acts to maintain macroeconomic stability and protect future generations from unsustainable debt burdens.

• The Charter aims to balance public debt levels with the need for inclusive development and public service delivery in Africa, focusing on improving transparency and accountability in the contraction and management of public debt, public guarantees, and fiscal policy.
• African governments are viewed as agents of the State with a responsibility to protect citizens' interests; consequently, all public debt and guarantees must be approved by Parliament, which provides oversight on behalf of the citizens.
• The document advocates for a legal framework where loans are used solely for their intended purpose unless Parliament votes otherwise, and requires the Minister of Finance to report on all loans and guarantees to Parliament every six months.
• To improve efficiency, African countries are encouraged to establish a Public Debt Management Office as a corporate body to prepare borrowing plans, conduct annual debt sustainability analyses, and maintain a reliable public database of all loans.
• The Charter proposes the enactment of a Fiscal Responsibility Act to ensure sound public finances through long-term fiscal rules, including the use of a three-year Medium Term Expenditure Framework and annual Fiscal Impact Assessments.
• A specific debt rule is proposed to limit the total stock of public debt to a maximum of 70% of GDP in any given year, noting that some West African Economic and Monetary Union (WEMU) members have adopted a limit of 50%.
• The document highlights a shift in development finance since 2008, with African countries increasingly relying on market-based instruments like sovereign bonds (Eurobonds) and Public Private Partnerships (PPPs), as well as non-traditional bilateral lenders such as China, India, and Brazil.
• Eurobonds are identified as carrying significant risks, including the fact that repayment occurs at maturity rather than being amortized, and exposure to foreign exchange risks due to US dollar denomination.
• The document notes that Public Private Partnerships (PPPs) pose risks regarding transparency and accountability, particularly because they are often treated as off-budget transactions.
• Historical data shows that African external debt as a percentage of GDP rose from 13% in 1970 to 112.4% in 1990, leading to a crisis that required relief through the HIPC and MDRI initiatives.

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 press release |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

@misc{africanforumandnetworkondebtanddevelopment2018african, author = {{African Forum and Network on Debt and Development}}, title = {{THE AFRICAN BORROWING CHARTER}}, publisher = {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} }