Africa’s COVID-19 Recovery Challenge: How the G20 Can Bridge the Development Financing Gap

This policy brief by the South African Institute of International Affairs examines the development financing gap facing African countries during their COVID-19 recovery. It argues that African nations lack the fiscal space available to advanced economies, facing high debt burdens and unfair credit ratings. The document proposes that the G20 and other development partners implement coordinated debt relief, reallocate resources to de-risk private investment, and establish fairer credit rating mechanisms to support sustainable economic transformation.

• African countries face a severe fiscal gap in their COVID-19 recovery compared to advanced economies; while advanced economies mobilised approximately 6% of their GDP, African countries mobilised barely 1%.
• The continent's debt situation is critical, with nearly half of African countries forecast to have interest payments exceeding 10% of government revenue in 2021, and over 20% in countries including Nigeria, Kenya, Angola, Ghana, and Zambia.
• African nations are disadvantaged in international capital markets, paying higher coupon rates than other borrowers. Specifically, spreads on African government bonds are 5.7 percentage points higher than those of other borrowers.
• Credit rating agencies have contributed to the high cost of borrowing; at least 10 African countries—including South Africa, Nigeria, and Angola—were downgraded within the first year of the pandemic.
• The G20's Debt Service Suspension Initiative (DSSI) provided $5.7 billion in relief to 43 countries, but its effectiveness is limited by the lack of participation from private creditors and unclear positions from China.
• The document recommends that the G20 partially cancel African debt, extend the DSSI for two more years, and explore the creation of independent, publicly owned credit rating agencies to ensure fairer assessments.
• Tunisia is cited as a successful model for donor coordination through its Ministry of Development and International Cooperation (MDCI), which uses a collaborative monitoring system to align partner support with a single national plan.

APA

South African Institute of International Affairs (2021). Africa’s COVID-19 Recovery Challenge: How the G20 Can Bridge the Development Financing Gap. https://saiia.org.za/research/africas-covid-19-recovery-challenge-how-the-g20-can-bridge-the-development-financing-gap/

Chicago

South African Institute of International Affairs. Africa’s COVID-19 Recovery Challenge: How the G20 Can Bridge the Development Financing Gap. 2021. https://saiia.org.za/research/africas-covid-19-recovery-challenge-how-the-g20-can-bridge-the-development-financing-gap/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Africa’s COVID-19 Recovery Challenge: How the G20 Can Bridge the Development Financing Gap |date=15 December 2021 |url=https://saiia.org.za/research/africas-covid-19-recovery-challenge-how-the-g20-can-bridge-the-development-financing-gap/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2021africas, author = {{South African Institute of International Affairs}}, title = {{Africa’s COVID-19 Recovery Challenge: How the G20 Can Bridge the Development Financing Gap}}, institution = {South African Institute of International Affairs}, year = {2021}, month = dec, url = {https://saiia.org.za/research/africas-covid-19-recovery-challenge-how-the-g20-can-bridge-the-development-financing-gap/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }