Johannesburg: A highl evel panel of African economists and policy experts has urged the G20 to launch a new debt-refinancing initiative aimed at easing the heavy external debt burdens of low-income countries. The proposal, which calls for a G20-IMF collaborative vehicle, seeks to provide these nations with both breathing room and a pathway to sustainable growth.
The expert group, established by South Africa’s G20 presidency earlier this year, warned that many African governments are faced with crippling interest payments that divert funding from essential sectors like health, education, and infrastructure. With external debt servicing in Africa projected to reach $89 billion this year, the panel argues that existing debt-relief frameworks are insufficient.
In its action plan, the panel emphasizes a paradigm shift moving away from traditional aid dependence toward a model anchored in investment-driven growth, supported by improved institutional strength. The experts advocate for a refinancing mechanism that would enable countries to stabilize their finances without resorting to short-term relief alone.
However, the proposal faces diplomatic headwinds. According to the panel, the United States has expressed “stiff resistance” to the initiative, notably by choosing not to attend the upcoming G20 summit in Johannesburg. Critics argue that securing commitment from major creditor countries and private lenders will be difficult, especially when coordinated restructuring may require shared concessions and more transparent creditor coordination.
Still, for many African states, the stakes could not be higher. If implemented, the refinancing plan could free up fiscal space to invest in critical development priorities. This initiative also signals a broader push to reform the global financial architecture, giving African nations a stronger voice in shaping debt solutions rather than being passive recipients of aid or restructuring.