Africa is not poor. It is being drained, By Steve Aborisade

Africa is not a continent of failed states and missed opportunities. It is a continent of extraordinary human capital, vast natural resources, and immense entrepreneurial energy, systematically constrained by a global financial architecture that was not designed with its interests in mind. Changing that architecture is a precondition for the stability, prosperity, and peace that the entire world claims to want.

Approximately 3.4 billion people live in countries that spend more on debt repayments than on health or education. In Africa, two in every three countries pay more in debt interest than they invest in the health of their citizens. The global debt system was not designed with the developing world in mind, and the cost of leaving it unreformed is one that the poorest populations continue to bear.

There is a number that should stop every country and every international creditor in their tracks. Three trillion dollars. That is the approximate sum that poorer countries send back to wealthier ones every single year, through debt servicing and tax loopholes. The Global South is not simply a recipient of global generosity, and by most honest measures, it is a net financier of global wealth.

The origins of this imbalance lie partly in history. When colonised nations gained independence, they inherited economies shaped to serve external markets, built around the export of raw materials, fossil fuels, and cash crops to fuel industrial growth in the global north. That left them with weakened domestic foundations and dependent on external financing to achieve real development – hospitals, roads, schools, and food systems. Borrowing to close that gap was a rational and necessary response to an engineered deficit, not a sign of mismanagement.

The problem has always been the terms. Countries in the Global South pay between two and twelve times more in interest than wealthy nations, not because their governments are reckless, but because the system classifies them as less creditworthy and then uses that classification to justify the very conditions that make them so. Between 1970 and 2023, governments across the Global South paid an estimated $2.2 trillion in interest to Western creditors alone. Higher risk ratings lead to higher interest rates, which increase debt burdens, and worsen ratings further. The cycle sustains itself.

The international financial institutions that control global borrowing’s rules were created 80 years ago by wealthy nations. Very little has changed since. Today, a small group of rich countries still holds more voting power in these institutions than the entire Global South combined, even though the Global South represents 85 per cent of the world’s population. That means the rules of borrowing, debt relief, and repayment are largely written by creditors, for creditors. That is a system designed to keep our communities in debt forever, and it needs to change. The rules of borrowing, debt relief, and repayment are therefore shaped overwhelmingly by creditor interests, with limited structural input from borrowing nations.

Three reforms are both urgent and achievable… The first is the establishment of a formal Borrowers’ Forum for developing nations, as proposed at the Seville Financing for Development summit and endorsed by the G20 under South Africa’s presidency. Creditor coordination mechanisms, most notably the Paris Club, have existed for decades. A parallel forum for sovereign borrowers would enable collective negotiation, shared technical expertise…

Private creditors have compounded this imbalance further. Commercial banks, hedge funds, and bondholders, based overwhelmingly in wealthy economies, now hold more than half of the public external debt of many developing nations. Unlike multilateral lenders, they operate under no binding obligation to participate in debt relief or restructuring.

The consequences are not abstract. When a government in sub-Saharan Africa must spend more on servicing foreign debt than on the health of its citizens, children die of preventable diseases. When debt conditionalities demand budget cuts as the price of relief, classrooms go unbuilt and teachers go unpaid. The burden of those cuts falls disproportionately on women, children, and the most vulnerable populations.

For example, Sub-Saharan Africa bears the highest burden of maternal and infant mortality globally, according to UNICEF, accounting for about 70 per cent of all global maternal deaths and featuring a maternal mortality ratio of roughly 454 to 545 deaths per 100,000 live births, with neonatal mortality rates peaking at 26 deaths per 1,000 live births. A debt architecture that blinds itself from these human tragedies, has failed at the most basic level of public purpose.

Three reforms are both urgent and achievable.

The first is the establishment of a formal Borrowers’ Forum for developing nations, as proposed at the Seville Financing for Development summit and endorsed by the G20 under South Africa’s presidency. Creditor coordination mechanisms, most notably the Paris Club, have existed for decades. A parallel forum for sovereign borrowers would enable collective negotiation, shared technical expertise, and a stronger, more consistent voice in the terms of their borrowing. Collective bargaining is rational, not radical, and the political commitment to build this forum is now the immediate priority.

The second is the mandatory inclusion of automatic debt service pauses in all sovereign borrowing agreements, including those with private creditors. These pauses should be pre-agreed, triggered by defined thresholds such as declared public health emergencies or major climate disasters, and free of interest for their duration. Every dollar remitted to a creditor during a crisis is a dollar unavailable for emergency response, vaccine procurement, or flood relief. Making such pauses standard rather than exceptional requires no new institutions, only political will and updated contractual frameworks.

The question is no longer whether the global debt system needs reform. The evidence is overwhelming and the consensus is growing. The question is whether the political will exists to act, and whether the voices of those most affected will be loud and sustained enough to make the cost of inaction impossible to ignore.