South Africa put debt sustainability on the G20 Agenda: Now others must cut through the Gordian Knot

Abuja, 23 November 2025 

At the conclusion of the G20 Leaders’ Summit in Johannesburg, South Africa, we, eight former African Presidents, Vice-Presidents and Prime Ministers who formed the African Leaders Debt Relief Initiative, commend President Ramaphosa’s leadership in placing debt sustainability at the center of the G20 agenda. We urge that the momentum generated at this summit be sustained, and that the work towards resolving the debt challenge of African and other highly indebted countries be intensified, accelerated and strengthened.

The ministerial declaration on debt sustainability released by G20 finance ministers and central bank governors in October represents a welcome and necessary first step in recognizing the scale and complexity of the challenge. Yet, much remains to be done. The dialogue initiated in Johannesburg must not conclude here. Commitments must translate into concrete, measurable progress towards a sustainable and lasting solution to the global debt crisis.

According to UNCTAD, more than 3.4 billion people live in countries today that spend more on debt service than on health or education. Public external debt across Africa has more than tripled since 2008 and debt service payments are projected to reach $88.7 billion in 2025—more than the continent’s total annual climate finance. Nearly 60% of low-income African countries are already in or at high risk of debt distress, diverting essential resources from public services, adaptation, and economic transformation.

Following the Lomé Declaration and the subsequent adoption of the Common African Position (CAP) on Debt, African countries have demonstrated that greater coordination and unified action can shape global policy. Initiatives such as the Borrowers’ Platform, co-led by Zambia and Egypt with support from UNCTAD, can help strengthen South–South cooperation, build capacity, and promote collective negotiation. These efforts underscore Africa’s growing role as a proactive and solutions-oriented actor in the global financial architecture.

In this spirit, we call on the G20 and the broader international community to work collaboratively and with a sense of urgency towards the following outcomes:

• Comprehensive Debt Restructuring for highly indebted countries. This includes:
  1. A predictable, fair, and inclusive debt restructuring process involving all creditors—private, bilateral, and multilateral.
  2. Ensuring comparability of treatment across creditors to avoid fragmentation and prolonged crises.
• Lowering the Cost of Capital for all developing countries. This includes:
  1. Credit enhancements through multilateral institutions to unlock affordable financing.
  2. Debt suspension mechanisms to create fiscal space for development and climate investments.

The momentum generated in Johannesburg must be preserved and strengthened. Looking ahead, we urge President Donald Trump, as the incoming G20 host and President Emmanuel Macron, hosting the G7 Summit, to use their convening power to push through lasting reforms. Together, we can ensure that debt relief becomes not just a conversation but a catalyst for sustainable growth, equity, and shared prosperity.

H.E. Olusegun Obasanjo, Former President of Nigeria and Chair of ALDRI:

“The process that began under South Africa’s G20 Presidency must now move forward with courage and resolve. We call on all G20 leaders—and our partners in the EU and AU—to ensure that debt reform remains a top global priority in 2026 and beyond. Dialogue is important, but what we need now is delivery.”

H.E. Nana Addo Dankwa Akufo-Addo, Former President of Ghana:

“The benefits of debt relief for Africa—and for the world—are transformative. Today, too many African nations spend more on debt than on healthcare or education. Easing this burden will allow governments to invest in essential services, create jobs, and build resilient economies.
Debt relief is not an act of generosity—it is a strategic investment in global stability, peace, and sustainability. What helps Africa helps the world.”

H.E. Ameenah Gurib-Fakim, Former President of Mauritius:

“The devastating impacts of recent storms such as Melissa, which swept away key infrastructure in Jamaica and other Caribbean nations, are stark reminders that small island states face the compounded crisis of debt and climate vulnerability. We bear the consequences of climate shocks we did not cause, while struggling under debts we cannot service. True resilience will come not from temporary relief but from a fair and predictable global financial system that enables investments in adaptation, recovery, and sustainable growth.”

H.E. Hailemariam Desalegn Boshe, Former Prime Minister of Ethiopia:

“In a deeply interconnected world, the resilience of one region sustains the stability of all. When debt traps nations in crisis, it weakens the global system we all depend on. Building resilience in Africa and other vulnerable regions is not charity — it is enlightened self-interest.”

H.E. Yemi Osinbajo, Former Vice-President of Nigeria:

“Africa stands ready to lead in the global green transition — to decarbonize, to innovate, and to create millions of new jobs in clean industries. But we cannot build a low-carbon future on the high cost of debt.

For many nations, meaningful participation in decarbonization will only be possible if debt relief creates the fiscal space to invest in people, technology, and sustainability. Debt reform and climate ambition must move forward together.”

About the African Leaders Debt Relief Initiative (ALDRI)

The African Leaders Debt Relief Initiative was launched in February 2025 to mobilize global support for comprehensive and timely debt reform. ALDRI is guided by the Cape Town Declaration and advocates for a fair, transparent, and sustainable international financial system.

Members of ALDRI:

H.E. Olusegun Obasanjo, Former President, Federal Republic of Nigeria (Chair)

H.E. Jakaya Mrisho Kikwete, Former President, United Republic of Tanzania

H.E. Macky Sall, Former President, Republic of Senegal

H.E. Joyce Banda, Former President, Republic of Malawi

H.E. Dr. Ameenah Gurib-Fakim, Former President, Republic of Mauritius

H.E. Hailemariam Desalegn, Former Prime Minister, Republic of Ethiopia

H.E. Nana Addo Dankwa Akufo-Addo, Former President, Republic of Ghana

H.E. Yemi Osinbajo, Former Vice President, Federal Republic of Nigeria

More Information

www.debt-leaders.org

Contact
https://debt-leaders.org/contact/

By Nana Addo Dankwa Akufo-Addo and Ulrich Volz

20 November 2025

ACCRA – On November 24-25, African and European leaders will meet in Luanda, Angola, for the European Union-African Union summit. Marking 25 years of EU-AU partnership, the gathering is not just a celebration but a moment to define what the next quarter-century will mean for relations between the two continents.

For Africa, the stakes could not be higher. Many African countries are burdened by unsustainable levels of sovereign debt that impede their ability to invest in resilient infrastructure and sustainable development. Public external debt has more than tripled since 2008, with a sharp rise in obligations to private bondholders.

These debt burdens have been compounded by the surge in borrowing costs and the depreciation of African currencies against the US dollar. African borrowers now face interest rates 2-3 times higher than those of wealthier countries, turning loans from lifelines into shackles.

This is not sound economics; it is structural injustice. In 2024 alone, African countries paid $163 billion just to service existing debts. These crushing payments, combined with exorbitant borrowing costs, have drained public resources and locked many economies into a vicious cycle of debt, climate, and development pressures.

Of the 38 African countries assessed under the International Monetary Fund’s Debt Sustainability Analysis for low-income economies, 21 are already in or at high risk of debt distress. But even this grim outcome understates the true scale of the problem, as the IMF’s framework systematically underestimates vulnerabilities, especially in climate-vulnerable countries. Too often, official classifications lag behind reality, shifting to “high risk” or “in distress” only after crises erupt, as evidenced when Zambia, Ghana, and Ethiopia defaulted.

Climate change has made an already unequal system even more punishing. Despite accounting for less than 4% of global greenhouse-gas emissions, Africa bears a disproportionate share of the consequences: droughts that destroy harvests, floods that displace millions of people, and storms that devastate entire communities.

Despite being the most vulnerable to climate shocks, African economies remain the least financially equipped to respond to them. The evidence is clear: the more climate-vulnerable a country is, the higher its borrowing costs. This “climate risk premium” inflates the cost of capital for African governments, eroding fiscal space and crowding out vital investments in health, education, and infrastructure. The result is chronic underinvestment that leaves countries even more exposed to climate shocks.

Although the IMF has pointed out that debt ratios have stabilized on average across Africa, this view overlooks the convergence of high debt burdens, acute climate vulnerability, and stalled progress toward achieving development goals. Treating debt as “stable” while ignoring these interlinked crises risks creating a dangerous blind spot.

The international community’s inadequate response has further undermined African countries’ trust in their Western partners. Europe’s credibility, in particular, has suffered, owing to the EU’s failure to fulfill climate commitments, its shrinking development aid, and its perceived double standards in crisis response. While other powers – including China, Russia, Turkey, and several Arab states – have steadily expanded their footprint on the continent, unresolved debt crises still threaten to erase decades of progress, destabilize governments, and fuel migration as Africans seek opportunities abroad.

Today’s rapidly shifting geopolitical terrain makes strong economic and political partnerships with African countries crucial. And with the EU’s prosperity and stability increasingly tied to Africa’s, policymakers cannot stand idly by while the continent grapples with multiple crises. European governments must use their considerable influence within the Bretton Woods institutions, the G20, and the G7 to reform the international financial system and mount a coordinated, comprehensive response to the ongoing debt crisis.

The G20’s Common Framework for Debt Treatments, intended to provide relief to struggling countries, has been touted as a breakthrough. In reality, however, it lacks binding rules to ensure fair burden-sharing among all creditors and fails to address the structural causes of debt accumulation. But a reprieve is not a resolution. As the Lomé Declaration, issued at the African Union’s Debt Conference in May, made clear, all creditors – private, bilateral, and multilateral – must be required to participate under comparable terms.

Building on that momentum, African countries have articulated a Common African Position on debt, a milestone in  the continent’s economic diplomacy. Europe should now engage on that basis and help translate this vision into tangible progress. With South Africa’s G20 presidency placing debt sustainability at the center of its agenda, there is a narrow window for action that must not be squandered. Africa and Europe must work together to ensure that debt reform remains a top priority for the G20, G7, IMF, World Bank, and United Nations.

Instead of short-term fixes, Africa needs a new global debt-relief initiative that is ambitious, equitable, and tailored to the continent’s unique realities. The potential gains are immense: debt relief can restore economic stability, free fiscal space for investment in essential services, and open new avenues for trade and growth.

Importantly, the impact would reach far beyond Africa. Genuine debt relief helps reduce poverty, expand access to education, and strengthen health systems, thereby safeguarding the world against future pandemics and humanitarian crises, reducing migration pressures, and mitigating security threats.

To be sure, rising tensions between the world’s major powers pose serious obstacles to debt relief. But if Europe throws its full weight behind it, meaningful progress is within reach. The cost would be far lower than that of another lost decade of underdevelopment and instability. When Africa is finally freed from the burden of debt, Europe – and the world – will rise with it.

This article was firstly published on Project Syndicate.

By Hailemariam Desalegn Boshe

ADDIS ABABA – At the Second Africa Climate Summit (ACS2), which took place in Addis Ababa a few months ago, I delivered a warning that every G20 government should heed: Africa cannot finance its future while drowning in debt.

The numbers speak for themselves: Sub-Saharan Africa requires $143 billion in annual climate finance, equivalent to roughly 7% of its total GDP. But current climate-finance flows into the region amount to only one-quarter of that. At the same time, African countries spent nearly $90 billion in 2024 servicing external debt.

Africa’s debt crisis is not a fringe issue; it is one of the biggest obstacles to achieving global climate goals and advancing the continent’s development. Every dollar that African countries spend on interest payments is a dollar that could have been invested in climate resilience and sustainable development, including adaptation measures and clean-energy infrastructure.

The idea that Africa can finance the green transition while simultaneously spending huge sums on debt service is absurd. The problem, as I and many others have pointed out, lies in the global financial architecture. Between 2022 and 2024, foreign private creditors extracted nearly $141 billion more in debt-service payments from developing economies than they disbursed in new financing. Meanwhile, multilateral institutions like the World Bank and the International Monetary Fund have been forced into the role of lenders of last resort, plugging gaps they were never designed to fill. The result is that stakeholders with the greatest means benefit the most from the international financial system, while vulnerable countries shoulder the heaviest burdens.

Worse, the absence of a predictable debt-resolution mechanism has left dozens of African countries in distress. Governments that are desperate to avoid default for fear of being punished by the markets choose to slash spending on education, health, and, increasingly, climate action.

The upcoming G20 summit in Johannesburg – the first ever to be held in Africa – must end with a commitment to restructuring the liabilities of highly indebted countries, most of which are on the continent, with specific timelines and shared accountability among creditors. Releasing a communiqué or establishing a working group will no longer do.

This is not a plea for leniency; it is a demand for rationality. As I noted in my speech at ACS2, a report from the United Nations Development Programme found that 16 African countries paid $74.5 billion in excess interest between 2000 and 2020 simply because credit-rating agencies had inflated their risk assessments. This reflects systemic prejudice, not market logic, perpetuated by an oligopolistic industry.

The G20 must seize this moment to devise a fair debt-resolution framework that both lenders and borrowing countries can agree on, and that recognizes the legitimacy of factoring climate vulnerability and investment needs into debt-sustainability assessments. This would unlock Africa’s green transition and, crucially, help to restore faith in multilateralism.

Debt relief is a precondition for global stability. When African countries are forced to divert scarce resources from adaptation measures to loan repayments, it becomes much more difficult for the world to deliver climate security. Floods in Mozambique, droughts in Somalia, and cyclones in Madagascar are not merely local tragedies. They also pose international risks.

The world came together in 1996 to write off debt with the launch of the IMF-World Bank Heavily Indebted Poor Countries Initiative. But that was a 20th-century tool. The 21st century demands a bolder response: a climate-linked debt-relief mechanism based on survival, not sympathy.

When the African Union first demanded a permanent seat in the G20 more than seven years ago, many said it was impossible. Now, the AU has taken its place at the table. If the G20 musters the will to act on debt relief this year, the crisis could follow a similarly positive trajectory. As Nelson Mandela is supposed to have said, “It always seems impossible until it’s done.”

Any delay will only deepen insolvency, forcing more African countries into default. The question that the G20 must answer is whether it has the courage to rebuild the world’s financial foundations. The group must reckon with the fact that it will long be remembered for its determination – or for its failure – to rise to the challenge.

This article was first published by Project Syndicate on November 18, 2025.

On October 14, Nicole Goldin, Senior Fellow at the Atlantic Council’s GeoEconomics Center and Head of Equitable Development at the UN University Centre for Policy Research (UNU-CP), sat down with H.E. Hailemariam Desalegn Boshe, former Prime Minister of Ethiopia, for a timely discussion on sovereign debt, sustainable growth, and climate resilience in Africa.

The conversation took place in Washington D.C. at the Atlantic Council, as part of a special side event held alongside the 2025 IMF/World Bank Annual Meetings. The event was co-hosted by the Heinrich Böll Foundation, the SOAS Centre for Sustainable Finance, and the Atlantic Council GeoEconomics Center.

Key Aspects of the Conversation

Hailemariam Desalegn offered an in-depth assessment of today’s global geoeconomic landscape, describing a world marked by “mutually reinforcing shocks” – including climate disasters, geopolitical tensions, and the lingering effects of COVID-19. He pointed out that these crises are “converging” in ways not seen before. These overlapping crises, he argued, are hitting developing economies hardest, especially in Africa, where extreme weather events and high borrowing costs are constraining governments’ ability to invest in growth and human capital.

At the heart of the exchange was the African Leaders Debt Relief Initiative (ALDRI), which Desalegn is a member of. He emphasized the need for greater coordination among creditors – public, private, and multilateral – and for a debt framework that integrates climate risks and resilience financing. As Desalegn highlighted, the existing international financial architecture does not yet reflect the realities of climate-driven shocks that directly affect macroeconomic stability in developing countries.

On domestic policy, Desalegn stressed that African nations must also “put their house in order”: improve financial management, broaden the tax base, strengthen procurement transparency, and curb illicit financial flows. Yet, he was equally clear that responsibility must be shared globally, as no amount of good governance can shield well-managed countries from climate-related or external shocks.

The conversation captures a pivotal moment in the debate on how to reconcile debt sustainability with climate adaptation and equitable growth. Desalegn’s remarks underline that investment, transparency, and partnership must go hand in hand to ensure that the financial system supports – not hinders – Africa’s ability to invest in its people and its resilience.

The full recording of the event can also be accessed here.

On 2 October 2025, H.E. Nana Akufo-Addo delivered a keynote address at the High-Level Seminar “Tackling the Triple Crisis of Debt, Climate, and Development” at Press Club Brussels. The event, organized by the Heinrich Böll Foundation Brussels, Debt Relief for a Green and Inclusive Recovery (DRGR) Project, IDOS, ETTG, Misereor, Caritas Europa, and Caritas Africa, brought together policymakers and experts ahead of the upcoming EU-AU Summit.

Excellencies, Distinguished Leaders, Ladies and Gentlemen,

As we gather on the eve of the AU–EU summit, to mark 25 years of partnership, we are reminded that this milestone is not only a celebration of the past, but a gathering to decide what the next 25 years will mean for our people. For Africa, that future hangs in the balance.

I have witnessed, as President of Ghana, the immense toll that unsustainable debt places on nations, stifling growth and dimming the hopes of our people.  I witnessed the suffocating grip of debt on our economy and on our citizens. This deeply troubled me and still does.  Ghana’s experience with debt restructuring under the G20 Common Framework offered some relief, but it also exposed the deep structural weaknesses of the global financial system. The sobering truth is that, the global financial system is not built to free us. It is built to bind us.

And so today, I do not speak for Ghana alone. I speak for Africa- for millions whose futures depend on our courage in this moment. We must call with one united voice for a bold and comprehensive global debt relief initiative—an initiative that moves beyond temporary fixes. An initiative that delivers true economic liberation and lasting development for our continent.

Let me begin by painting a picture of the reality we face. Africa’s debt burden has ballooned to staggering levels. As of 2025, the continent’s external debt exceeds $ 1 trillion, more than double what it was just five years ago. According to the United Nations Conference on Trade and Development, in 2023 developing countries together, paid nearly $487 billion in servicing external public debt. Think of that number: four hundred and eighty-seven billion dollars. For half of these nations, it meant sacrificing at least 6.5 percent of all their export earnings just to stay current on debt.

And in Africa, the reality is even starker. Research from Boston University and Christian Aid tells us that more than thirty African countries are now spending more on interest payments alone than on public health. Not on total debt service — only on interest. Money that does not build schools. Money that does not train nurses. Money that does not save a single life.

This is not simply an economic statistic. This is a moral indictment. Because every dollar diverted to creditors is a dollar taken from a hospital, from a child’s vaccination, from a community’s future.

The choice before us is clear. Will we allow nations to keep choosing between paying their creditors and protecting their citizens? Or will we summon the courage to reform a system that forces such a choice? The answer to that question will define not just our economies, but our humanity.

Excellencies, Distinguished Ladies and Gentlemen

Today, twenty-one African countries stand either at high risk of debt distress or already trapped within it. And the trap is cruel: a vicious cycle where climate vulnerability feeds debt, and debt deepens climate vulnerability.

Our economies are among the most exposed to climate shocks anywhere in the world. Yet we are also among the least equipped, fiscally, to respond. The evidence is clear: the more climate-vulnerable a nation, the higher the cost of borrowing it must endure. This ‘climate risk premium’ inflates the price of capital for African governments, eroding fiscal space and crowding out priority social and infrastructure spending. The inevitable result is underinvestment. That underinvestment then heightens exposure to the next climate shock. And so the cycle spins, tightening its grip.

My friends, this crisis is not of Africa’s making alone. Global shocks—the COVID-19 pandemic, the war in Ukraine, and the mounting toll of climate disasters—have deepened vulnerabilities rooted in an international order that is profoundly unjust. African nations, rich in resources and potential, are forced to export raw materials at depressed prices while importing finished goods at a premium. Our debt-to-GDP ratios, averaging around 60-70%, may seem modest compared to the G7’s over 111%, but the terms are punitive. Interest rates for African borrowers are often double or triple those faced by wealthier nations, turning loans into shackles rather than lifelines. This is not economics. It is inequity.

Reflecting on Ghana’s journey, when my administration turned to the G20 Common Framework in 2023, the path was anything but straightforward. We faced delays, complex negotiations, and uneven burden-sharing. But persistence paid off. In 2024, we restructured about 13 billion dollars of Eurobonds and secured commitments that will deliver roughly 10.5 billion dollars in external debt service relief through 2026.

As a result of these efforts, our debt ratio—which had climbed to the mid-80s as a share of GDP—declined to about 70.5 percent in 2024. This progress underpinned our IMF programme and restored investor confidence. And with stability came momentum: Ghana’s economy grew by 5.7 percent last year, one of the strongest performances in Africa.”

But let us be clear: the process was sequential, not simultaneous. It prolonged uncertainty. It eroded investor confidence. And it inflicted a heavy cost at home that was a “dark cloud moment”, for me as President.  Domestic bondholders—pensioners, youth, ordinary Ghanaians—bore losses that shattered livelihoods. Even now, as Ghana begins to emerge, the relief feels less like a solution and more like a pause before the next storm.

The Framework we signed up to under the programme, while a step forward, is fundamentally flawed. It lacks binding rules to hold all creditors—public and private—to fair burden-sharing. It fails to address the structural roots of debt accumulation. In short, it offers reprieve, not resolution.

This is why Africa needs something bigger. Something bolder. A new global debt relief initiative—ambitious, equitable, and tailored to our realities. I have long called for the cancellation of Africa’s debts, as I did in 2021 on international platforms, urging debt forgiveness to unlock resources for development. Today, I renew that call.

Let us reflect  for one moment on a programme of ‘Debt Relief for Green Investment and Resilience’—linking debt cancellation directly to investments in climate adaptation and sustainable growth. Africa contributes less than 4 percent of global emissions, yet we suffer the brunt of climate change: droughts that ravage crops, floods that displace entire communities. It is time the world recognized this injustice—and acted with the urgency it demands.

Let me remind this gathering of a landmark truth. In an advisory opinion, the International Court of Justice affirmed the duty to make reparation for climate damages. That duty can take the form of restitution, compensation, satisfaction—or a combination of all three. And by even the most conservative estimates, the scale of such reparations runs into the trillions. Seen in that light, debt relief for Africa is not an act of generosity. It is an act of justice. For much of the debt we carry was incurred in responding to climate shocks not of our making.

But justice delayed is justice denied. That is why, as a pragmatic step, we must reform the G20 Common Framework to make it faster and fairer. As the African Union’s Debt Conference in Lomé emphasized earlier this year, all creditors—public, private, and multilateral—must be compelled to participate, ensuring comparability of treatment. The IMF and World Bank’s 2025 restructuring playbook is a beginning, but it must evolve into a binding global compact.

Comprehensive proposals already exist. The Debt Relief for Green and Inclusive Recovery Project has laid out solutions including targeted relief, lower interest rates, and longer maturities. Taken together, these could release billions for achieving the Sustainable Development Goals.

Yet debt relief, by itself, is not enough. It must be matched by Africa’s own reforms. I have long argued that our continent must move beyond aid—by embracing efficiency, transparency, and domestic resource mobilization. In Ghana, we digitized our tax system, strengthened the fight against corruption, and invested in education and agriculture. Across Africa, we must build stronger institutions, diversify our economies, and expand trade through the African Continental Free Trade Area.

But let us be clear: without global support, even the most courageous reforms will be undermined. Undermined by predatory lending, by punitive terms of trade, by a financial system that too often works against us rather than with us.

Distinguished Ladies and Gentlemen,

Earlier this year, I joined seven fellow African leaders—former Presidents, Prime Ministers, and Vice President, in launching the African Leaders’ Debt Relief Initiative in Cape Town. We chose to act because we can express what sitting Ministers and Heads of government often cannot. Too often silence prevails as leaders seek to endure pressures or remain absorbed by domestic challenges that debt relief could ironically help ease.  Indeed African nations are being asked to endure the unbearable.

I must commend President Cyril Ramaphosa who hosted us for an extensive dialogue and gave his full support to our advocacy.  He did not stop there. The very next day, addressing the G20 meeting of Finance Ministers, he publicly endorsed our initiative. His leadership matters, and so does the timing. In just over two months, the G20 will meet in Johannesburg—the first such gathering ever held on African soil—just ahead of the AU–EU Summit in Luanda. Progress on debt is still possible, and we know it is a priority for President Ramaphosa. As a former President and an advocate for debt relief for Africa, my time and experiences are at the disposal of any initiative that addresses the huge burden of debt carried by African Countries.

To our European partners, I say this: you hold significant influence within the G20. With Germany, France, Italy, and the European Union, you command four seats at that table. Africa, home to more than 1.5 billion people, has only two—South Africa and the African Union.

So I entreat you: hear the voice of your neighbouring continent. Stand with the AU and with the South African G20 Presidency to advance ambitious reform of the Common Framework and to establish a truly comprehensive global debt relief initiative in this Jubilee Year, 2025. Implement the solutions already on the table. I am talking about immediate debt service suspension, comprehensive restructuring, and new concessional financing. By doing so, you do not invest in charity—you invest in partnership. You invest in a prosperous Africa that contributes to global stability and shared growth.

The benefits of debt relief for Africa—and for the world—are enormous and life-changing. It strengthens economic stability. Today, too many African nations spend more on debt than on healthcare or education. By easing this burden, governments can invest in essential services and unlock new opportunities for trade and investment, creating gains that ripple across the global economy.

It also delivers profound humanitarian dividends. Freed resources can reduce poverty, expand education, and build resilient health systems. That does not only help Africa—it protects the world from future pandemics and humanitarian crises.

Debt relief enhances peace and security as well. Crushing debt often fuels unrest and instability. Lifting that weight supports stability and reduces risks that affect us all, from migration pressures to global security threats.

Debt relief also strengthens the fight against climate change. Tools such as debt-for-climate swaps enable African nations to invest in renewable energy, conservation, and adaptation—protecting a continent rich in resources yet deeply vulnerable to climate shocks.

And above all, debt relief is a matter of moral leadership. By pursuing it, the international community acknowledges historic inequities, builds trust, and renews global cooperation. In short: relieving Africa’s debt is not just good for Africa—it is good for the world. What helps Africa, helps us all

We stand at a crossroads. We can allow debt to weigh down nations, stifle opportunity, and fuel instability. Or we can choose a different path — one of partnership, growth, and shared responsibility. Debt relief is not an act of generosity. It is a strategic choice for a safer, healthier, and more sustainable world. So let us act not tomorrow, not in the distant future, but now. Let us match words with courage, and commitments with action.

The sacrifices we make today, the compromises, the collaborations we engage in today can only inure to the benefit of our world.  Let us take a cue from the impacts of global warming. If it has taught us anything, it has taught us one thing- we are all impacted, no matter who is doing what, when, why, how and where. In the same vein, when Africa rises free from the weight of debt, the whole world rises with it.

In closing, let us envision an Africa unbound—a continent where debt no longer dictates destiny, where our youth innovate freely, and our resources fuel shared prosperity. As I said in my addresses before, Africa is eager, Africa is willing. With a global debt relief initiative, we can transform crisis into opportunity. Together, let us forge this path. Thank you, and God bless Africa.

On 10 September 2025, H.E. Hailemariam Desalegn Boshe, former Prime Minister of Ethiopia, delivered the keynote speech at an official event organised by ALDRI at the Second Africa Climate Summit. The speech is reproduced verbatim below.

(greetings)

It is a great honor for me to welcome you all at this first session of day 3 of the African Climate Summit here in Addis Abeba. It is titled “Accelerating Climate Finance and Debt Relief: Unlocking Africa’s Green and Resilient Future“.

This year’s summit builds on the momentum of the first Africa Climate Summit in Nairobi in 2023, where leaders adopted the Nairobi Declaration.

Central to the declaration was the demand to overhaul the global financial system and ease Africa’s crushing debt burden. These were not merely economic asks; they were lifelines for climate resilience.

The Nairobi Declaration confidently stated Africa is a continent of opportunity: Rich in resources, endowed with endless renewable energies, and home of a young, entrepreneurial workforce. This is true: Given the right financing opportunities, the continent can become a vital part of the solution to global climate change.

But this requires investment, and all over the world, investment is mostly debt financed, private and public. And the two are connected: The country risk premium of private investment is clearly influenced by the public debt situation. The worse your public debt situation, the higher also the risk premium for private investments. So in a situation of debt distress, it doesn‘t help if someone points to the billions of private money that you just need to attract.

And here we are stuck. Many African nations today find themselves in a vicious circle of climate vulnerability and debt. Many of the continent’s economies rank amongst the most climate-vulnerable in the world, yet also among the least fiscally able to respond to this threat. There is strong empirical evidence that climate vulnerability drives up the cost of sovereign debt, causing a climate risk premium on African debt. The higher cost of capital leaves governments with even less fiscal room to invest in adaptation and resilience. The underinvestment that follows only heightens exposure to future climate shocks, feeding back into rising vulnerability to further shocks – setting in motion a vicious circle.

Unless we confront the debt crisis head-on, efforts to finance Africa’s climate ambitions will continue to fall short.

Finance is about numbers, so let me mention three numbers from a recent policy brief of the Debt Relief for Green and Inclusive Recovery Project, using data from the World Bank and Climate Policy Initiative:

First: Sub-Saharan Africa will require more than US$1.4 trillion this decade – about US$143 billion annually – to meet adaptation and resilience goals. On an annual basis this is more than 7% of their current GDP. This does not yet include mitigation.

Second: actual climate finance flows from 2021 to 2023 average just US$35 billion per year, less than a quarter of what’s needed. Worse still, more than half of this comes in the form of new debt rather than grants.

Third: these same governments are projected to spend US$865 billion or roughly 4% of GDP on debt servicing over the same decade.

So while we appreciate all contributions to climate finance, which help our countries: Unless we alleviate the excessive debt burden on our countries, incoming money for climate finance will amount to little.

Or, to frame it positively, debt relief could cover a very significant part of Africa’s climate finance gap.

Africa’s debt crisis is multifactorial, but to a significant extent it is reflecting a broken financial system that puts poorer countries at a disadvantage. To give you just one example, the United Nations Development Programme found that 16 African countries paid an additional US$74.5 billion in excess interest between 2000 and 2020 because credit rating agencies had inflated their risk assessments.

Africa was also particularly affected by a series of macro-shocks in the past five years: first the COVID-19 crisis which burdened our countries with additional expenses to stabilise health systems and our economies, while important sources of income like tourism, remittances or commodity exports collapsed.

Then, as a result of the war in Ukraine, food and fertilizer prices exploded, and food and oil importing countries were hard hit by skyrocketing energy costs.

This price shock triggered a wave of inflation. As part of a triple whammy, the subsequent steep interest rate rises by leading central banks made refinancing on international capital markets prohibitively expensive. And while rates have come down but only a little, we are still burdened with a mountain of expensive debt.

Nobody has better described the critical debt situation of many countries in the developing world than Indermit Gill, the World Bank‘s Senior Vice President and Chief Development Economist. He originally wanted to join us today but regrettably had to cancel his participation at very short notice.

He wrote the foreword of the landmark International Debt Report that the Bank published last December. It is a remarkable document, I really commend the Bank for this clear-eyed analysis. What follows is an extensive quote from its foreword authored by Indermit Gill:

Since 2022, foreign private creditors have extracted nearly US$141 billion more in debt service payments from public sector borrowers in developing economies than they disbursed in new financing. 

That withdrawal has upended the financing landscape for development. For two years in a row now, the external creditors of developing economies have been pulling out more than they have been putting in—with one striking exception. The World Bank and other multilateral institutions pumped in nearly US$85 billion more in 2022 and 2023 than they collected in debt service payments. That has thrust some multilateral institutions into a role they were never designed to play—as lenders of last resort, deploying scarce long-term development finance to compensate for the exit of other creditors.

That reflects a broken financing system. Capital—both public and private—is essential for development. Long-term progress will depend to an important degree on restarting the capital flows that most developing countries enjoyed in the first decade of this century. But the risk-reward balance cannot be allowed to remain as lopsided as it is today, with multilateral institutions and government creditors bearing nearly all the risk and private creditors reaping nearly all the rewards.

In the absence of a predictable global system for restructuring debt, most countries facing distress opted to tough it out rather than default and risk being cut off indefinitely from global capital markets. In some cases, new financing arriving from the World Bank promptly went out to pay off private creditors.

The result, for many developing countries, has been a devastating diversion of resources away from areas critical for long-term growth and development such as health and education.

Let me add here also climate adaptation and resilience.

But to continue from the remarkable World Bank report:

The squeeze on the poorest and most vulnerable countries—those eligible to borrow from IDA—has been especially fierce. 

No wonder that more than half of IDA-eligible countries are either in debt distress or at high risk of it. No wonder that private creditors have been retreating even as multilateral financing increases. 

These facts imply a metastasizing solvency crisis that continues to be misdiagnosed as a liquidity problem in many of the poorest countries. It is easy to kick the can down the road, to provide these countries just enough financing to help them meet their immediate repayment obligations. But that simply extends their purgatory. 

These countries will need to grow at a faster clip if they are to shrink their debt burdens—and they will need much more investment if growth is to accelerate. Neither is likely given the size of their debt burdens. 

It’s time to face the reality: the poorest countries facing debt distress need debt relief if they are to have a shot at lasting prosperity. A twenty-first century global system is needed to ensure fair play in lending to all developing economies.

So much from this remarkable document that spelt out with such clarity the situation that we are in.

I am one of eight African leaders – former Presidents, Prime-Ministers and Vice-Presidents -, who have come together earlier this year in Cape Town to form the African Leaders Debt Relief Initiative. We can speak out, where sitting ministers and heads of government may want to stay silent in order to „tough it out“ in absence of a predictable system of debt relief.

President Cyril Ramaphosa was so kind to receive us for an extensive conversation. He strongly endorsed our initiative, not only in private, but also publicly when speaking to the G20 meeting of finance ministers that started the next day.

He reminded us that perseverance will be needed. He said that It was never going to be easy to achieve that the African Union be represented as a permanent member of the G20. But African unity and perseverance succeeded in pushing it through, and the same will be true for debt relief.

There are still two and a half months until the G20 meeting in Johannesburg, the first on African soil. Progress on debt is still possible, and we know it is a priority for President Ramaphosa.

To quote another great African leader: „It always seems impossible until it‘s done“.

Thank you for your attention.

This article was firstly published in context.news.

Abuja, 21 May 2025

As leaders from over 80 countries gather in Brussels for the EU-AU Ministerial Meeting, eight former African leaders are calling for urgent and transformative action to address the growing sovereign debt crisis across the African continent. This critical moment marks a potential turning point in Africa-Europe cooperation, as the world grapples with rising economic uncertainty, slashed growth forecasts, and increasing debt burdens, particularly in developing economies.

Currently, more than 25 African countries are either in or at high risk of debt distress. With debt service costs projected to consume nearly 30% of African government revenues by 2025, the crisis is severely constraining investment in essential public services, sustainable development, and private sector growth.

The African Leaders Debt Relief Initiative (ALDRI), launched in February 2025, is spearheaded by former African leaders and aims to mobilize international support for meaningful debt relief measures. Through the Cape Town Declaration (28 February 2025), ALDRI reiterates the need for:

• Comprehensive and timely debt restructuring for highly indebted countries,
• and lowering the cost of capital for all low and middle-income nations.

ALDRI also endorses the African Union Lomé Declaration on Debt that was adopted at the AU Conference on Debt held in Lomé, Togo (12–14 May). It calls, among others, for:

• A reform of the G20 Common Framework to ensure timely and sufficient debt relief,
• The rechanneling of Special Drawing Rights (SDRs) through Multilateral Development Banks (MDBs),
• And targeted debt forgiveness on a case-by-case basis.

As Africa prepares for the 4th International Conference on Financing for Development (FfD4) in Sevilla and during the G20 under South Africa’s presidency, ALDRI urges European partners to stand in solidarity with Africa in this defining moment and support these vital and far-reaching reforms.

Debt relief is not charity—it is an investment in shared prosperity. Unlocking fiscal space is essential to achieving the goals of Agenda 2063, creating jobs through sustainable trade and investment, and advancing Africa’s green, digital, health, and education transitions.

Together, a prosperous and sustainable Africa and Europe can be more than a vision—it can be our shared reality.

H.E. Ameenah Gurib-Fakim, Former President of Mauritius

“The AU-EU summits are significant this year as the two unions mark 25 years of collaboration. They present opportunities for both continents to take stock of the enduring partnership and how to strengthen collaboration in mutually beneficial ways. Europe can show solidarity and lead others in measures towards debt relief and mutual trade development in forums like the G20.  

If African countries are to deliver on the SDGs, they need debt relief so that their resources are used to invest in education, health and safety nets. As we look forward to another 25 years of cooperation, we urge the EU to commit to comprehensive debt restructuring for highly indebted countries and to lowering the cost of capital for Africa.”

H.E. Hailemariam Desalegn, Former Prime Minister of Ethiopia

“The African Union – European Union Ministerial in Brussels and the Heads of States Summit later in the year present a significant opportunity for European countries to heed Africa’s call for debt relief. This will be achieved by committing to comprehensive debt restructuring and lowering the cost of capital, which would enable African nations to invest in critical areas of development such as health and education. Additionally, these summits offer a platform to strengthen the broader partnership between the EU and Africa, fostering greater collaboration on issues such as climate change, trade, security, and sustainable development. A mutually beneficial partnership between the two regions is key to addressing shared challenges and building a more resilient global economy.”

The African Leaders Debt Relief Initiative comprises the following African leaders: 

HE Olusegun Obasanjo, Former President, Federal Republic of Nigeria (Chair)

HE Jakaya Mrisho Kikwete, Former President, United Republic of Tanzania

HE Macky Sall, Former President, Republic of Senegal

HE Joyce Banda, Former President, Republic of Malawi

HE Dr. Ameenah Gurib-Fakim, Former President, Republic of Mauritius

HE Hailemariam Desalegn, Former Prime Minister, Republic of Ethiopia

HE Nana Addo Dankwa Akufo-Addo, Former President, Republic of Ghana

HE Yemi Osinbajo, Former Vice President, Federal Republic of Nigeria

In a recent interview with The East African, former President of Mauritius and ALDRI member, Dr. Ameenah Gurib-Fakim, emphasized the importance of debt restructuring for African nations. Speaking on Kenya’s current debt dilemma, she remarked that “debt restructuring is very close to [her] heart as it is one way of achieving Africa’s sovereignty.”

Read the full article here: To restructure or not: Kenya’s debt dilemma – The East African

Lagos, 25 April 2025

By Olusegun Obasanjo

This op-ed was first published in Project Syndicate.