“A call for African-led solutions amidst a flawed global framework”
By Taurai Chiraerae and Emmanuel Innocents Edoun
Lomé, Togo – 12th May 2025: In this beautiful evening in the capital of the west African country of Togo, the heat outside the venue is not telling the full story of what 500 delegates are grappling with inside the conference centre hosting, the African Union Debt Conference under the overarching theme of “Restoring and Safeguarding Debt Sustainability.”
On that day of 12 May 2025, the Conference in Lomé concluded with a resounding call for Africa to take ownership of its escalating debt crisis. The high stakes gathering, marked by the physical presence of Heads of State from Ghana and Togo, and a virtual address by the President of Zambia, underscored the deep political commitment to finding lasting solutions. The attendance of numerous Central Bank Governors, Ministers of Finance, civil society organisations, and member countries further highlighted the urgency and the direct involvement of key economic decision-makers in addressing the continent’s precarious financial situation.
The atmosphere in Lomé was thick with a sense of urgency, amplified by the haunting echoes of the 1980s debt crisis that crippled the continent. History serves as a stark reminder: a staggering 187% surge in external debt between 1976 and 1980 plunged Africa into prolonged economic stagnation. While subsequent debt relief initiatives offered temporary respite, fundamental vulnerabilities persisted, culminating in another dramatic debt surge between 2010 and 2020. By 2023, Africa’s external debt had ballooned to approximately 24.5% of its combined GDP, a figure that, while varying with different calculation methods, still represents a significant drain on national resources.
The stark reality is that the IMF/World Bank’s Debt Sustainability Framework now categorizes a deeply concerning 25 African nations as being in or at high risk of debt distress, a dramatic increase from just 9 in 2012. This escalating crisis is forcing a painful trade-off, with a growing number of African nations now allocating more funds to servicing their debts than to essential healthcare, jeopardizing the immense $1.3 to $1.6 trillion financing gap required to achieve the Sustainable Development Goals (SDGs) and Agenda 2063.
A central tenet of the discourse in Lomé was a growing disillusionment with the existing global debt resolution mechanisms, particularly the G20 Common Framework. The experiences of nations like Ghana and Zambia painted a sobering picture of a framework widely perceived as slow, complex, and ultimately failing to deliver the timely and comprehensive debt relief urgently required. This sentiment resonated strongly throughout the conference, with participants drawing lessons from past initiatives like the Heavily Indebted Poor Countries Initiative (HIPC) and the Debt Service Suspension Initiative (DSSI). The pivotal question debated was whether the time has come for a new, Africa-specific debt relief framework – one designed by and for the continent, tailored to its unique structural challenges, and genuinely aimed at freeing up crucial fiscal space for sustainable development.
A key element of this proposed African-led approach is the urgent need for enhanced credit ratings in Africa. Participants voiced concerns about perceived biases inherent in global credit rating methodologies. The potential of the African Credit Rating Agency to improve Africa’s representation in global capital markets, strengthen domestic rating systems, and bolster investor confidence was strongly emphasized as a critical step in tackling the continent’s debt woes. The prevailing sentiment was that solutions must prioritize Africa’s long-term growth and sovereignty over outdated and creditor-biased global architectures.
The conference featured a comprehensive examination of the continent’s deepening debt crisis through in-depth panels and technical discussions. Experts dissected the growing fiscal pressures arising from limited market access and escalating debt servicing costs. The panel on “Africa’s Public Debt Management Agenda in Restoring and Safeguarding Debt Sustainability” underscored the urgent need for liquidity support and strategic investments aligned with Agenda 2063. A critical assessment of the “G20 Common Framework and the Current Debt Conundrum in Africa” highlighted its inadequacies and the painful experiences of Ghana and Zambia, advocating for a new, Africa-led debt workout mechanism based on an intergovernmental process that ensures participatory negotiations between all creditors and debtors.
Discussions also centered on strengthening domestic debt management practices through enhanced oversight, fiscal discipline, and institutional capacity (“Sound Debt Management Practices and Public Debt Sustainability in Africa”), and the crucial role of parliaments in ensuring accountability (“Legislative Oversight and Accountability in Public Debt”). Furthermore, the conference addressed biases in global credit rating methodologies (“Enhancing Credit Ratings in Africa”) and explored innovative financing solutions and the role of Pan-African financial institutions. Deliberations on “Debt Transparency and Accountability” underscored the importance of accessible debt data and civil society engagement.
The culmination of these in-depth discussions was the adoption of the Lomé Declaration on Africa’s Debt, a unified African position intended to guide future negotiations and reforms. This declaration comes at a significant time, coinciding with the African Union’s declaration of 2025 as the year of “Justice for Africans and People of African Descent Through Reparations,” explicitly linking historical injustices to the continent’s current debt burden.
In this critical context, the potential of Artificial Intelligence (AI) to revolutionize Africa’s approach to sovereign debt management emerged. championed by institutions like the Centre for Artificial Intelligence and Sustainable Development (CAISD). Dr. Emmanuel Edoun articulated the need for African governments to create jobs and enhance domestic resource mobilization to unlock finances for development. As further explored in CAISD’s analysis, AI offers a powerful toolkit for enhanced transparency, accountability, and ultimately, debt sustainability. By leveraging AI for sophisticated data analysis, real-time monitoring, predictive risk assessment, streamlined reporting, and enhanced audit capabilities, African governments can gain unprecedented insights into their debt profiles and potential vulnerabilities. Furthermore, the integration of AI with technologies like blockchain holds the promise of ushering in an era of immutable and transparent debt records.
The Lomé Declaration on Africa’s Debt signifies a unified continental resolve to take ownership of its debt challenges. Embracing innovative solutions like AI, alongside a determined push for a new, Africa-led debt resolution framework based on a participatory intergovernmental process, may well be the key to finally breaking free from the shackles of unsustainable debt and charting a course towards genuine fiscal sovereignty and lasting development. It is crucial that African debt restructuring efforts do not undermine the African Union’s Agenda 2063. The experiences of countries like Zambia, Ghana, Ethiopia, and Côte d’Ivoire, now entering debt restructuring processes, must reinforce and protect public services, ensuring that resources are not diverted away from the people to creditors. The current G20 Common Framework’s exclusion of other creditors, including multilateral lenders and private creditors, undermines the effectiveness of the entire process. The 55 African countries could collectively advocate for a debt service suspension, even on interest rates, to prevent the crowding out of essential service delivery. Monitoring debt-to-revenue ratios is critical to ensure that debt service obligations do not supersede governments’ responsibilities to their citizens.
This necessitates the implementation of progressive, not regressive, tax systems to avoid transferring the burden of borrowing costs onto the populace. Enhanced oversight on debt management, involving parliaments, the judiciary, auditor general reports, and strengthened debt management offices, is paramount for accountability. Ultimately, the Lomé conference underscored a continent determined to forge its own path towards sustainable financial solutions and economic recoveries, recognizing that true progress requires a fundamental shift in the global debt architecture and a firm commitment to African-led solutions.
Copyrights (CAISD)
