The latest Global Sovereign Debt Roundtable (GSDR) report warns that many African economies face high debt service costs that are crowding out essential spending on health, education, and infrastructure.
The report, released on October 15 by the International Monetary Fund (IMF) and World Bank, finds that while overall debt levels in low-income and emerging market economies have stabilised since the COVID-19 pandemic, they remain significantly higher than before 2020. Several countries, including those in sub-Saharan Africa, are particularly vulnerable to refinancing risks and rising interest costs.
The GSDR, co-chaired by the IMF, World Bank and G20 Presidency, says urgent co-ordinated action is needed to help heavily indebted countries access timely and adequate debt restructuring. It urges reforms to make the process faster and more transparent, especially for non-bonded commercial debt, where no formal coordination mechanisms exist.
The report highlights ongoing restructuring cases in Africa, including Ghana, Zambia, and Ethiopia, where progress has been made, but negotiations with some private creditors continue. Ghana and Zambia have restructured more than 90% of their external debt under IMF-supported programmes, while Ethiopia finalised an agreement with official creditors earlier this year.
Beyond restructuring, the GSDR warns that countries with “sustainable but strained” debt positions need urgent relief from high debt service costs to preserve growth and social investment.
The IMF–World Bank “three-pillar approach” encourages liability management operations, such as voluntary debt swaps or buybacks, alongside domestic reforms to attract private investment and improve debt transparency.
The report also calls for stronger systems to prevent future debt crises. It urges governments to improve debt data accuracy and adopt digital platforms for real-time reconciliation between borrowers and creditors. A World Bank pilot in Indonesia is being used as a model for potential rollout to low-income countries.
Without these reforms, the GSDR warns, many developing nations could remain trapped in a cycle of debt and underdevelopment, undermining Africa’s economic recovery and resilience.
–IMF/ChannelAfrica–
