BoG Governor leads Africa's call for urgent debt restructuring at World Bank/IMF Meeting
At the ongoing IMF-World Bank Spring Meetings, African leaders have warned that soaring debt levels in developing nations are derailing progress towards the Sustainable Development Goals (SDGs).
The Governor of the Bank of Ghana, Dr Johnson Asiama, speaking on behalf of African Governors, stressed that urgent international intervention is needed to prevent a full-blown economic crisis across the continent.
Debt servicing
Dr Asiama revealed that nearly half of Sub-Saharan African countries are either at high risk of debt distress or already trapped in it.
He noted with concern that many nations are now spending more on debt repayments than on essential services such as health and education.
This alarming trend, he said, has been worsened by a combination of global shocks, including the lingering effects of the COVID-19 pandemic, geopolitical tensions, climate disasters, and tightening financial conditions.
“Africa’s per capita spending on interest payments now exceeds investments in health and education,” Dr Asiama said.
He added: “This is unsustainable and demands immediate action from the international community.”
Four-pronged solution
The African Governors outlined a series of measures to tackle the crisis.
First, they called for stronger IMF support, including maintaining concessional financing through the Poverty Reduction and Growth Trust (PRGT) and replenishing the Catastrophe Containment and Relief Trust (CCRT).
They also urged the IMF to align debt solutions with SDG priorities and provide tailored technical assistance to help countries implement growth-friendly reforms.
Second, they pressed for an overhaul of the IMF’s debt sustainability framework to better reflect the unique challenges facing developing nations, particularly climate-related risks and new debt instruments.
Governor Asiama emphasised the need for improved early warning systems to detect debt distress before it escalates.
Third, the Governors demanded faster and more effective debt restructuring processes. While acknowledging the efforts of the Global Sovereign Debt Roundtable (GSDR) and the G20 Common Framework, Asiama stressed that progress has been too slow. He called for greater transparency, stronger private creditor participation, and fairer burden-sharing among multilateral and bilateral lenders.
Finally, the African leaders urged enhanced coordination among international financial institutions, including the IMF, World Bank, and regional bodies.
They proposed innovative financing mechanisms such as debt-for-climate swaps and blended finance to simultaneously address debt burdens and climate vulnerabilities.
Global solidarity
Governor Asiama praised IMF Managing Director Kristalina Georgieva for her leadership but insisted that more must be done.
“African nations are doing their part by strengthening fiscal management, but we cannot solve this crisis alone,” he said. “The world must act now, before it’s too late.”
The speech highlighted growing frustration among African policymakers over the slow pace of global debt relief efforts. With the 2030 deadline for the SDGs fast approaching, the call for decisive action has taken on renewed urgency.