Africa’s Debt Priorities: A Sustainability Perspective

This policy brief from the South African Institute of International Affairs examines the rising public debt burden in Africa, the complexities of its current composition, and the necessary reforms to the global financial architecture. It argues that while the G20 has established mechanisms like the Common Framework and the Debt Service Suspension Initiative (DSSI), these are insufficient. The document proposes that the African Union (AU), as a new permanent member of the G20, should advocate for an African Credit Rating Agency, an African Debt Monitoring Mechanism, and a more inclusive debt restructuring process that includes private creditors and provides longer repayment periods.

• Africa's public debt reached 65.6% of GDP in 2022. While lower than the 89.3% peak in 1995, the region faces severe sustainability challenges, with eight countries currently in debt distress and 13 at high risk of debt distress.
• The composition of African debt has shifted toward more complex and expensive sources. Private creditors now account for over 40% of total external debt, and bilateral debt has expanded beyond the Paris Club to include China, Saudi Arabia, India, and the United Arab Emirates.
• High debt servicing costs are diverting critical resources from social and development spending. In the 2019–2021 period, the ratio of public debt interest payments to health expenditure was 147%, and the number of countries spending over 10% of revenue on interest payments rose from nine in 2010 to over 20 in 2022.
• The G20's Common Framework for Debt Treatments is viewed as insufficient and slow. The document cites Zambia, which took nearly two years to reach an agreement point in June 2023, and calls for the framework to be expanded to middle-income countries and to include private creditors in the creditor committee.
• African nations face a 'funding squeeze' and perceived bias from the 'big three' credit rating agencies (Fitch, Standard and Poor’s, and Moody’s). A UNDP study suggests African countries could save up to $74.5 billion if ratings were less subjective, leading the AU to plan the launch of an African Credit Rating Agency in early 2024.
• To improve debt transparency and management, African leaders agreed during the September 2023 Africa Climate Summit to adopt an African Debt Monitoring Mechanism by June 2024.
• The document recommends that the African Union use its permanent G20 membership to push for specific reforms, including a 3rd chair in IMF governance, the re-channeling of Special Drawing Rights (SDRs) to MDBs, and the extension of debt repayment periods to a decade for countries in distress.

APA

South African Institute of International Affairs (2023). Africa’s Debt Priorities: A Sustainability Perspective. https://saiia.org.za/research/africas-debt-priorities-a-sustainability-perspective-required-support-from-the-g20/

Chicago

South African Institute of International Affairs. Africa’s Debt Priorities: A Sustainability Perspective. 2023. https://saiia.org.za/research/africas-debt-priorities-a-sustainability-perspective-required-support-from-the-g20/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Africa’s Debt Priorities: A Sustainability Perspective |date=14 December 2023 |url=https://saiia.org.za/research/africas-debt-priorities-a-sustainability-perspective-required-support-from-the-g20/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2023africas, author = {{South African Institute of International Affairs}}, title = {{Africa’s Debt Priorities: A Sustainability Perspective}}, institution = {South African Institute of International Affairs}, year = {2023}, month = dec, url = {https://saiia.org.za/research/africas-debt-priorities-a-sustainability-perspective-required-support-from-the-g20/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }