Africa’s debt crisis: Momentum from G20 can help find solutions
Priorities
The end of South Africa’s G20 presidency does not signal the end of its ability or responsibility to promote the issues it prioritised during 2025. The country can still advocate for action on these matters through its continued participation in the G20 and in other international and regional forums.
In this article, I argue that going forward, South Africa should prioritise the financial challenges confronting Africa that it championed in 2025.
South Africa established four overarching priorities for its G20 presidency. Two of these focused on finance: one sought to “ensure debt sustainability for low-income countries,” and the other aimed to mobilise finance for a just energy transition.
The importance of debt, development finance, and climate to Africa’s future is clear. Over half of African countries are either in debt distress or at risk of it. More than half of Africa’s population live in countries that spend more on servicing their debt than on health and education.
In addition, 17 African countries experienced net debt outflows in 2023. This means they used more foreign exchange to repay external creditors than they received in new debts that could finance development. The continent is also experiencing extreme weather events that are adversely affecting food security and human well-being.
In short, African countries are caught in a vicious cycle: the impacts of climate change and the struggle to meet debt obligations interact in ways that undermine their ability to achieve their sustainable development goals.
Priorities in action
South Africa’s G20 agenda was ambitious. Success required meaningful action at three levels:
• Awareness: South Africa needed to bring the international community to a better understanding of the debt and development finance challenges confronting African countries and the consequences of failing to address them.
• Process: South Africa needed to convince the G20 to address the shortcomings in the Common Framework for debt relief for low-income countries. The experiences of Zambia and Ghana demonstrate that the Common Framework is cumbersome, slow, and overly favourable to creditors. For example, the framework requires a debtor to engage separately with each group of creditors in a sequential process. This means a country cannot negotiate with commercial creditors until it has successfully negotiated with official creditors. Commercial creditors cannot grant debt relief until official creditors are satisfied with the deal and confident that they will not receive more favourable treatment than other creditors.
Another complication is the IMF’s multiple roles in debt restructurings: it acts as both advisor and creditor to debtor countries, and it produces the debt sustainability analysis that determines the level of debt relief expected from all other creditors. The more optimistic its assessment, the smaller the contributions creditors, including the IMF, are expected to provide. These contributions can take the form of new funding or revised debt terms.
• Substance: The current debt restructuring process treats debt as a technical financial and legal issue rather than as the complex, multifaceted problem experienced by debtor countries. This perspective limits negotiations to the terms of financial contracts, largely ignoring the adverse impact of debt on the debtor’s other legal obligations and on its social, political, environmental, and cultural situation.
This approach leaves debtor countries to manage these other issues independently. The artificial separation between debt owed to creditors and other development obligations makes it extremely difficult for countries to escape the vicious cycle of debt, development, and climate challenges. It forces them to choose between meeting creditor commitments and fulfilling development goals.
Progress in 2025
Over the course of 2025, South Africa has been highly effective in raising awareness of the African debt crisis and its severe impact. It persuaded G20 finance ministers and central bank governors to issue a declaration on debt sustainability at the conclusion of their October meeting.
The declaration is a clear acknowledgment of the problem and of the need for further discussion on how debt issues are managed by both debtors and creditors. Unfortunately, it does not contain firm G20 commitments on concrete remedies.
Substantial progress at the process and substance levels has not yet been made, and it is unlikely to change in the remaining weeks of South Africa’s G20 presidency.
Three actions beyond the presidency
There are, however, three actions South Africa can take to ensure that the African debt crisis continues to receive attention.
1. Technical report from an expert panel
South Africa should ask a group like the African Expert Panel, which it established to advise the president, to prepare a technical report identifying and analysing all barriers to Africa accessing affordable, sustainable, and predictable external development finance.
This report should be submitted to the South African president in the first half of 2026. South Africa will still be part of the G20 Troika, comprising the current, immediate past, and incoming G20 presidents, enabling it to table the report at the G20. The report can also be used to promote action in other regional and global forums.
2. African Borrower’s Club
South Africa and the African Union should establish an African Borrower’s Club independent of the G20. This forum would allow African sovereign debtors to share information and lessons on negotiating sovereign debt transactions and on responsible debt management.
The club could collaborate with regional financial institutions and organisations such as the African Legal Support Facility, sponsoring workshops where interested countries can share knowledge and assess financing options critically. It should also establish an African Sovereign Debt Roundtable modelled on the Global Sovereign Debt Roundtable. This informal forum, operating under the Chatham House Rule, would allow stakeholders to discuss the design of a sovereign debt restructuring process that is effective, efficient, fair, and holistic.
3. IMF Governance and Practices
South Africa should capitalise on the recognition that the impacts of climate, inequality, unemployment, and poverty are macro-critical for Africa. It should call for a review of the IMF’s operating principles, practices, and governance arrangements.
While multilateral development banks have undergone G20 reviews that enhanced their capital frameworks and operations, the IMF has not experienced a similar process, despite its operations requiring potentially more extensive revisions. – The Conversation*Danny Bradlow is a Professor/Senior Research Fellow, Centre for the Advancement of Scholarship at the University of Pretoria.
In this article, I argue that going forward, South Africa should prioritise the financial challenges confronting Africa that it championed in 2025.
South Africa established four overarching priorities for its G20 presidency. Two of these focused on finance: one sought to “ensure debt sustainability for low-income countries,” and the other aimed to mobilise finance for a just energy transition.
The importance of debt, development finance, and climate to Africa’s future is clear. Over half of African countries are either in debt distress or at risk of it. More than half of Africa’s population live in countries that spend more on servicing their debt than on health and education.
In addition, 17 African countries experienced net debt outflows in 2023. This means they used more foreign exchange to repay external creditors than they received in new debts that could finance development. The continent is also experiencing extreme weather events that are adversely affecting food security and human well-being.
In short, African countries are caught in a vicious cycle: the impacts of climate change and the struggle to meet debt obligations interact in ways that undermine their ability to achieve their sustainable development goals.
Priorities in action
South Africa’s G20 agenda was ambitious. Success required meaningful action at three levels:
• Awareness: South Africa needed to bring the international community to a better understanding of the debt and development finance challenges confronting African countries and the consequences of failing to address them.
• Process: South Africa needed to convince the G20 to address the shortcomings in the Common Framework for debt relief for low-income countries. The experiences of Zambia and Ghana demonstrate that the Common Framework is cumbersome, slow, and overly favourable to creditors. For example, the framework requires a debtor to engage separately with each group of creditors in a sequential process. This means a country cannot negotiate with commercial creditors until it has successfully negotiated with official creditors. Commercial creditors cannot grant debt relief until official creditors are satisfied with the deal and confident that they will not receive more favourable treatment than other creditors.
Another complication is the IMF’s multiple roles in debt restructurings: it acts as both advisor and creditor to debtor countries, and it produces the debt sustainability analysis that determines the level of debt relief expected from all other creditors. The more optimistic its assessment, the smaller the contributions creditors, including the IMF, are expected to provide. These contributions can take the form of new funding or revised debt terms.
• Substance: The current debt restructuring process treats debt as a technical financial and legal issue rather than as the complex, multifaceted problem experienced by debtor countries. This perspective limits negotiations to the terms of financial contracts, largely ignoring the adverse impact of debt on the debtor’s other legal obligations and on its social, political, environmental, and cultural situation.
This approach leaves debtor countries to manage these other issues independently. The artificial separation between debt owed to creditors and other development obligations makes it extremely difficult for countries to escape the vicious cycle of debt, development, and climate challenges. It forces them to choose between meeting creditor commitments and fulfilling development goals.
Progress in 2025
Over the course of 2025, South Africa has been highly effective in raising awareness of the African debt crisis and its severe impact. It persuaded G20 finance ministers and central bank governors to issue a declaration on debt sustainability at the conclusion of their October meeting.
The declaration is a clear acknowledgment of the problem and of the need for further discussion on how debt issues are managed by both debtors and creditors. Unfortunately, it does not contain firm G20 commitments on concrete remedies.
Substantial progress at the process and substance levels has not yet been made, and it is unlikely to change in the remaining weeks of South Africa’s G20 presidency.
Three actions beyond the presidency
There are, however, three actions South Africa can take to ensure that the African debt crisis continues to receive attention.
1. Technical report from an expert panel
South Africa should ask a group like the African Expert Panel, which it established to advise the president, to prepare a technical report identifying and analysing all barriers to Africa accessing affordable, sustainable, and predictable external development finance.
This report should be submitted to the South African president in the first half of 2026. South Africa will still be part of the G20 Troika, comprising the current, immediate past, and incoming G20 presidents, enabling it to table the report at the G20. The report can also be used to promote action in other regional and global forums.
2. African Borrower’s Club
South Africa and the African Union should establish an African Borrower’s Club independent of the G20. This forum would allow African sovereign debtors to share information and lessons on negotiating sovereign debt transactions and on responsible debt management.
The club could collaborate with regional financial institutions and organisations such as the African Legal Support Facility, sponsoring workshops where interested countries can share knowledge and assess financing options critically. It should also establish an African Sovereign Debt Roundtable modelled on the Global Sovereign Debt Roundtable. This informal forum, operating under the Chatham House Rule, would allow stakeholders to discuss the design of a sovereign debt restructuring process that is effective, efficient, fair, and holistic.
3. IMF Governance and Practices
South Africa should capitalise on the recognition that the impacts of climate, inequality, unemployment, and poverty are macro-critical for Africa. It should call for a review of the IMF’s operating principles, practices, and governance arrangements.
While multilateral development banks have undergone G20 reviews that enhanced their capital frameworks and operations, the IMF has not experienced a similar process, despite its operations requiring potentially more extensive revisions. – The Conversation*Danny Bradlow is a Professor/Senior Research Fellow, Centre for the Advancement of Scholarship at the University of Pretoria.
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