At the first-ever African Union Conference on Debt in Lomé, Togo, policymakers resolved to reform the G20 Common Framework, the debt relief effort forged during the Covid-19 crisis.
The G20 Common Framework has been used for Ghana and Zambia’s debt restructuring processes but critics say it is slow, creditor-driven and no longer fit for purpose.
The framework aims to coordinate official bilateral creditors, including Paris Club countries and China, to negotiate debt restructurings with a single official creditor committee, followed by negotiations with bondholders and commercial creditors.
A debt restructuring process under the Common Framework is closely intertwined with the implementation by a debtor country of an IMF programme.
Lomé Declaration on Debt
The African Union Lomé Declaration on Debt, adopted on 15 May, resolved “to advocate for reforming the G20 Common Framework by setting up a universally accepted methodology for comparability of treatment, enhancing transparency and inclusivity amongst stakeholders during restructuring”.
Faure Gnassingbé, president of Togo, said that Africa is spending billions of dollars to service debts, funds which are needed for service delivery such as healthcare.
“Today, we are witnessing the drying up of foreign aid. That is why we cannot continue to use the G20 Common Framework. We need new criteria. Africa needs a new debt doctrine,” he said.
Gnassingbé said the United States move to drop funding of the African Development Fund, the concessional arm of the African Development Bank Group (AfDB), is a wake-up call for the continent to prioritise debt sustainability and rethink debt management.
In a February analysis of the Common Framework, thinktank ODI said that it has “delivered substantive debt relief… but these restructurings illustrate the significant challenges in how contemporary restructurings for low and middle-income countries work: that they are too little, too late and too complex.”
Among other measures it said the Framework needs “faster coordination, transparency and clarity over the following: timelines and processes for restructuring, and the definition of comparability of treatment.”
South Africa has made debt solutions one of its priorities while it holds the rotating presidency of the G20 group of nations. The African Union joined the bloc as a permanent member in September.
The declaration also outlined measures to resolve current debt challenges; measures to mobilise new financing while safeguarding debt sustainability; a commitment to debt restructuring; a commitment to sound debt management practices; and advocacy for a legally binding global mechanism at UN level for debt resolution.
Growing distress
Between 2010 and 2020 Africa’s external debt increased more than fivefold and accounted for almost 65% of GDP in 2023. Even though Africa’s average debt-to-
GDP ratio is expected to decrease to 60% in 2025, the continent faces an escalating debt crisis, according to the African Union.
Statistics from the IMF and World Bank Debt Sustainability Framework show that the number of African countries in debt distress, or at high risk, has risen from nine in 2012 to 25 in March 2025.
Moses Vilakati, commissioner for agriculture at the AU, said a common position on debt must be built on the bedrock of sound, proactive, and transparent debt management at the national level.
“We must strengthen our legal and institutional frameworks for borrowing, ensuring rigorous analysis of terms and conditions, and aligning all new debt strictly with productive investments that generate returns and enhance our repayment capacity,” he said.
“Enhancing debt data transparency and disclosure is not just a technical requirement, it is a governance imperative that fosters accountability and allows for informed decision-making by parliaments and citizens alike.”
Credit ratings discussed
African governments also resolved to expedite the ongoing establishment of the Pan African Credit Rating Agency, saying it could counter punitive ratings that countries receive from international ratings agencies.
Ghana President John Mahama said Africa must speak with one voice to push for fairer global financial rules.
“Credit agencies must adopt methodologies that reflect the structural and potential of African reforms, not just penalise us for volatility that we did not create,” he said.
Delegates also called on the International Monetary Fund to urgently reform the special drawing rights (SDR) allocation formula by incorporating countries’ liquidity needs beyond IMF quotas.