Diverting Development: The G20 and External Debt Service Burden in Africa IEJ Sovereign Debt Working Paper Series #1

Diverting Development: The G20 and External Debt Service Burden in Africa

IEJ Sovereign Debt Working Paper Series #1

Authors: Marina Zucker-Marques, Riccardo D’orsi, Kamal Ramburuth, Patrick Njoroge, and Kevin Gallagher


Africa stands at a critical crossroads. Home to vast renewable energy resources, transition minerals, and a rapidly growing population, the continent has the potential to lead in global sustainable development. Yet this potential is being stifled by an overwhelming external debt burden.

The new working paper, Diverting Development: The G20 and External Debt Service Burden in Africa, launched by the Institute for Economic Justice (IEJ) and Boston University’s Global Development Policy Centre, reveals how Africa’s development ambitions are derailing. With over 57% of the population living in countries that spend more on debt service than on education or healthcare, the impact is stark. Chronic hunger is rising, and 85% of the Sustainable Development Goals are off track, stagnating, or regressing.

Despite its relatively low external debt stock, Africa faces the highest borrowing costs among developing regions. In 2023, African bond yields averaged 9.8%—significantly higher than in Asia or Latin America. Debt servicing now consumes nearly 17% of government revenues and 15% of export earnings, eroding fiscal space and reducing import capacity.

This crisis is not of Africa’s own making. It stems largely from external shocks—geopolitical, macroeconomic, and climate-related. Yet the international mechanisms intended to help, particularly the G20’s Common Framework, are failing. The framework is slow, offers minimal relief, and lacks fairness and alignment with development goals. It also excludes many countries in need.

With the G20 Summit taking place in Africa for the first time in 2025, and with the African Union now a full member, this moment offers a historic opportunity. The report outlines bold policy recommendations, including automatic debt standstills, enhanced debt sustainability assessments, broader eligibility, and linking relief to climate and development priorities.

The time for action is now. Without urgent reform of the global debt system, Africa’s development will remain perpetually diverted.