How to get Africa out of debt

The document examines how the COVID-19 pandemic exacerbated existing debt distress in Africa, where average debt-to-GDP ratios rose from 60% to 70%. It critiques the G20/Paris Debt Service Suspension Initiative (DSSI) for its limited scope, noting that private creditors and multilateral development banks (MDBs) have largely refused to participate. The brief highlights the role of credit rating agencies in discouraging participation due to fears of downgrades and argues that many nations face solvency crises rather than temporary liquidity issues. It recommends extending the DSSI, reallocating IMF Special Drawing Rights, and establishing a permanent UN-led forum for debt monitoring and restructuring.

• The COVID-19 pandemic intensified existing debt distress in Africa, increasing average debt-to-GDP ratios from approximately 60% to 70%.
• The G20/Paris Debt Service Suspension Initiative (DSSI) has seen a disappointing response, with private creditors and multilateral development banks (MDBs) failing to join, which limits the initiative's effectiveness.
• Credit rating agencies have actively discouraged participation in the DSSI by suggesting that the suspension of debt payments could be viewed as a credit negative or a sovereign default.
• Many African nations are experiencing long-term solvency crises rather than simple temporary liquidity shortages, meaning the DSSI may only be delaying an inevitable crisis.
• China's role in the DSSI is a point of contention, specifically regarding whether the China Development Bank (CDB) should be classified as an official bilateral creditor or a private bank.
• Middle-income African countries that are ineligible for the DSSI are particularly vulnerable as they rely more heavily on private capital markets and lack external support.

APA

South African Institute of International Affairs (2020). How to get Africa out of debt. https://saiia.org.za/research/how-to-get-africa-out-of-debt/

Chicago

South African Institute of International Affairs. How to get Africa out of debt. 2020. https://saiia.org.za/research/how-to-get-africa-out-of-debt/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=How to get Africa out of debt |date=25 November 2020 |url=https://saiia.org.za/research/how-to-get-africa-out-of-debt/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2020how, author = {{South African Institute of International Affairs}}, title = {{How to get Africa out of debt}}, institution = {South African Institute of International Affairs}, year = {2020}, month = nov, url = {https://saiia.org.za/research/how-to-get-africa-out-of-debt/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }