Africa has a debt crisis: momentum from G20 in South Africa can help find solutions

This research paper argues that South Africa should continue to prioritise the financial and debt challenges facing Africa following the conclusion of its 2025 G20 presidency. The author highlights a 'vicious cycle' where debt obligations and climate impacts undermine sustainable development goals, and proposes three specific actions—a technical report on finance barriers, the creation of an African Borrower's Club, and a review of IMF operating principles—to address these systemic issues.

• African countries are facing a severe debt crisis where over 50% are either in debt distress or at risk of it, with more than half of the population living in nations that spend more on debt servicing than on health or education. In 2023, 17 African countries saw net debt outflows, meaning payments to external creditors exceeded new debt received for development.
• The G20's Common Framework for debt relief for low-income countries is described as cumbersome, slow, and biased toward creditors. A primary flaw is the sequential process requiring debtors to negotiate with official creditors before commercial creditors, who in turn wait for official deals to ensure they do not receive less favourable treatment. Additionally, the IMF's dual role as advisor and creditor, and its control over debt sustainability analysis, influences the amount of relief provided.
• Current debt restructuring processes treat debt as a technical financial and legal issue, ignoring the broader social, political, environmental, and cultural impacts on the debtor country. This forces sovereign debtors to choose between meeting creditor commitments and fulfilling development obligations, trapping them in a cycle of debt and climate vulnerability.
• To maintain momentum after its G20 presidency, South Africa is encouraged to take three actions: commission a technical report by the African Expert Panel by the first half of 2026 to identify barriers to external development finance; collaborate with the African Union to establish an independent African Borrower's Club and an African Sovereign Debt Roundtable; and call for a review of the IMF's governance and operating principles.

APA

South African Institute of International Affairs (2025). Africa has a debt crisis: momentum from G20 in South Africa can help find solutions. https://saiia.org.za/research/africa-has-a-debt-crisis-momentum-from-g20-in-south-africa-can-help-find-solutions/

Chicago

South African Institute of International Affairs. Africa has a debt crisis: momentum from G20 in South Africa can help find solutions. 2025. https://saiia.org.za/research/africa-has-a-debt-crisis-momentum-from-g20-in-south-africa-can-help-find-solutions/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Africa has a debt crisis: momentum from G20 in South Africa can help find solutions |date=16 November 2025 |url=https://saiia.org.za/research/africa-has-a-debt-crisis-momentum-from-g20-in-south-africa-can-help-find-solutions/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2025africa, author = {{South African Institute of International Affairs}}, title = {{Africa has a debt crisis: momentum from G20 in South Africa can help find solutions}}, institution = {South African Institute of International Affairs}, year = {2025}, month = nov, url = {https://saiia.org.za/research/africa-has-a-debt-crisis-momentum-from-g20-in-south-africa-can-help-find-solutions/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }