Africa’s Rising Debt Crisis: A Historical Echo for Black Communities
By Darius Spearman (africanelements)
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The Weight of Debt: A Present Danger for Africa
The African Union has delivered a powerful and urgent message: the continent’s rising debt crisis is severely hindering its progress. Mahamoud Ali Youssouf, chairperson of the AU Commission, confirms that many African governments are now spending more money on servicing their debts than on critical investments in human development (africanews.com). This alarming trend is a deeply felt concern across the African diaspora, as we witness the struggles of our ancestral lands. Our communities understand that the future of Africa is intertwined with the well-being and upliftment of Black people globally.
This crisis is not merely an economic statistic; it carries profound human consequences. African nations are projected to spend over $70 billion on debt servicing in 2024 alone, with estimates for external debt service reaching a record $89.4 billion in the same year and $88.7 billion in 2025 (africanews.com, southernafricantimes.com). Consequently, vital funds are diverted from essential public services. A staggering 57 percent of Africa’s population lives in countries where debt servicing surpasses social spending on health, education, and infrastructure (one.org). In fact, Sub-Saharan African nations spent more on debt interest payments than on education in 2023 (one.org). This imbalance directly impacts the lives of millions, hindering access to basic necessities and limiting opportunities for future generations.
Echoes of Exploitation: Colonialism and Debt
To truly understand Africa’s persistent debt burden, we must look beyond recent economic policies and acknowledge the deep historical links to colonialism and the transatlantic slave trade. The transatlantic slave trade ripped away generations of Africans, stealing human capital and wealth while devastating societies for centuries (bu.edu, zarejournal.com). This forced extraction of people and resources created a foundational disadvantage that continues to resonate today.
Moreover, the era of colonialism further entrenched these inequalities. European powers redesigned African economies to serve their own needs, extracting vast amounts of resources without fair compensation (bu.edu, zarejournal.com). They distorted local industries and built infrastructure primarily for exploitation, rather than balanced development. After independence, many African nations inherited economic structures dependent on their former colonial masters, often burdened with unfair trade agreements and neocolonial policies. These arrangements perpetuated resource extraction and limited economic diversification, ultimately forcing these nations to borrow heavily under unfavorable terms, thus contributing to cycles of debt. The legacy of these historical injustices is critical for understanding why Africa faces such deep-seated economic challenges today.
The “Lost Decade” and Structural Adjustment
The foundation of the modern African debt crisis can be directly traced to the 1980s, a period often called the “lost decade.” Following two major oil shocks, many developing nations, including those across Africa, experienced a severe decline in their public finances (bu.edu). This era was characterized by low growth, increased poverty, and widespread political instability across the continent. It set the stage for external intervention that would reshape African economies for decades.
In response to this growing debt, international financial institutions such as the International Monetary Fund (IMF) and the World Bank introduced Structural Adjustment Programs, or SAPs, during the 1980s and 1990s (bu.edu). These programs offered loans but required recipient governments to implement harsh economic reforms. These included fiscal austerity measures, leading to severe cuts in public spending on vital social services such as healthcare and education (polity.org.za). Additional reforms included the privatization of state-owned industries and utilities, which often resulted in job losses and increased costs for basic services (polity.org.za). While proponents claimed these reforms were essential for stability, critics argued that SAPs often neglected social development and sometimes increased debt instead of reducing it (bu.edu). These policies disproportionately affected vulnerable populations, including Black communities globally, by reducing access to essential services and employment opportunities (polity.org.za).
A Brief Respite: Debt Relief Initiatives
The severity of Africa’s debt burden eventually prompted international calls for relief. In response, the IMF and World Bank launched the Heavily Indebted Poor Countries (HIPC) Initiative in 1996, followed by the Multilateral Debt Relief Initiative (MDRI) in 2005 (un.org, afdb.org). These initiatives aimed to reduce the external debt of eligible low-income countries to a sustainable level. These efforts largely achieved their immediate objective, significantly lowering Africa’s average debt-to-GDP ratio from over 65.9 percent in 2000 to 32 percent by 2010 (afreximbank.com). This reduction provided some much-needed fiscal breathing room for development spending.
However, this relief proved temporary. The underlying structural issues that made African nations vulnerable to debt in the first place were never fully addressed. As a result, the continent remained susceptible to external shocks and persistent global economic imbalances. The breathing room gained was crucial, yet it was not enough to fundamentally alter the trajectory of debt accumulation. The economic structures inherited from colonialism and reinforced by SAPs continued to make African nations vulnerable to cycles of indebtedness.
Africa’s Debt-to-GDP Ratio Evolution (2000-2028)
This chart illustrates the significant fluctuations in Africa’s aggregated debt-to-GDP ratio, highlighting the re-accumulation of debt after a period of relief (afreximbank.com).
The New Debt Wave: Shifting Creditors
The new debt wave for Africa gained strength despite previous relief efforts. This rapid re-accumulation of debt began around 2011. It was made worse by several factors, including the stagnation of official development aid, sharp commodity price shocks after 2013, and expanded access to international financial markets (afreximbank.com). Africa’s aggregated debt-to-GDP ratio increased by 39.3 percentage points between 2008 and 2020, reaching 68.6 percent in 2023 (afreximbank.com). The continent’s public debt has ballooned from $120 billion in 1990 to a staggering $1.8 trillion today (afreximbank.com, polity.org.za). A high debt-to-GDP ratio means a significant portion of a country’s economic output must be allocated to servicing its debt. This leaves less fiscal space for essential investments in public services, affecting millions of lives (bu.edu).
The composition of Africa’s debt has also dramatically changed. In the past, multilateral and bilateral creditors, such as the Paris Club, held most of the debt (afreximbank.com). Today, private creditors and non-Paris Club bilateral creditors, like China, which is Africa’s biggest bilateral lender, hold a substantial portion (african.business). In 2023, private debt comprised over half (54.3 percent) of Africa’s external debt, surpassing bilateral (18.7 percent) and multilateral (27.1 percent) creditors (afreximbank.com). This shift towards commercial lending typically comes with higher, less favorable interest rates. African countries pay significantly more for borrowing compared to other developing regions, sometimes 500 percent more from global capital markets than from Multilateral Development Banks (afreximbank.com). For instance, in 2023, Africa’s bond yields averaged 9.8 percent, which sharply contrasts with 5.3 percent in Asia and 6.8 percent in Latin America (afreximbank.com). This situation illustrates the unique challenges in accessing affordable financing, which is a significant factor in perpetuating economic discrimination against African nations.
The rising debt burden has pushed many African countries into precarious financial positions. As of late 2023, more than half of African countries were assessed to be at high risk or already in debt distress (afdb.org). Nine African countries were in ‘debt distress’ as of September 2023, with an additional 15 at high risk and 14 at moderate risk (zarejournal.com). By early 2025, 20 low-income African countries faced bankruptcy or a high risk of debt distress (afdb.org). When a country is in “debt distress,” it means it is struggling to service its debt, leading to missed payments or accumulating arrears (polity.org.za). This is serious because it leads to lost access to international capital markets, credit downgrades, and a loss of investor confidence (bu.edu). Furthermore, governments are often forced to cut public spending, directly impacting access to healthcare, education, and social safety nets for ordinary citizens, thus increasing poverty and social instability (polity.org.za).
Africa’s Call to Action: A New Financial Compact
Recognizing the urgency, African leaders are actively seeking collective action and systemic reforms within the global financial architecture. The AU chairperson, Mahamoud Ali Youssouf, delivered his warning at the G20–Africa High-Level Dialogue on Debt Sustainability in Addis Ababa in November 2025 (africanews.com, polity.org.za). This dialogue, held under South Africa’s G20 presidency, aims to tackle the systemic flaws in the global financial system that perpetuate structural inequality and biased creditworthiness metrics (africanews.com). The G20 is a powerful group of 19 countries and the European Union, representing 85 percent of global GDP (un.org). However, critics argue it lacks inclusivity for developing nations (polity.org.za).
Africa is prioritizing cooperation at the G20 to advocate for a “new financial compact” to ensure fairer access to capital for African nations (afreximbank.com). This compact proposes establishing a more transparent and equitable debt restructuring mechanism, moving away from current ad-hoc approaches (un.org). Additionally, it calls for a significant increase in concessional financing and grant-based aid, rather than debt-creating loans, to support sustainable development goals (un.org). From a racial justice lens, this new compact would directly challenge how historical legacies of colonialism and racialized perceptions of risk contribute to higher borrowing costs and less favorable terms for African countries (un.org). The African diaspora, including African Americans, are impacted through channels like remittances, which are affected by economic instability in African nations (afreximbank.com). This situation also fuels pan-African solidarity and advocacy efforts for debt relief and fairer financial systems (afreximbank.com).
Initiatives like the G20 Common Framework for Debt Treatment, launched in 2020 to assist low-income countries, have faced criticism for being too slow and inefficient (theeastafrican.co.ke, parliament.uk). For example, Zambia applied for debt treatment in early 2021 but only finalized a restructuring deal with bilateral creditors in April 2024 (theeastafrican.co.ke). This slowness disproportionately affects vulnerable populations by delaying critical debt relief, thus postponing essential government spending on social services (one.org, polity.org.za). Delayed relief means countries continue to divert scarce resources to debt servicing rather than investing in healthcare, education, social safety nets, and climate adaptation (one.org). This situation directly impacts the well-being and survival of marginalized communities. Social justice advocacy groups are actively pushing for reforms to the Common Framework, urging for greater transparency, faster implementation, and a more equitable restructuring process that prioritizes human rights and developmental needs (one.org, polity.org.za).
Africa’s External Debt by Creditor Type (2023)
This pie chart illustrates the significant shift in Africa’s creditor landscape, with private creditors now holding over half of the continent’s external debt (afreximbank.com).
About the Author
Darius Spearman is a professor of Black Studies at San Diego City College, where he has been teaching for over 20 years. He is the founder of African Elements, a media platform dedicated to providing educational resources on the history and culture of the African diaspora. Through his work, Spearman aims to empower and educate by bringing historical context to contemporary issues affecting the Black community.
