At the first African Union conference on Lome's debt in Togo, policymakers decided to reform the G20 common framework.
The G20 Common Framework is being used in the debt restructuring process in Ghana and Zambia, but critics say it is slow, creditor-driven and no longer suited to purpose.
The purpose of this framework is to coordinate official bilateral creditors, including the Paris Club countries and China, negotiate debt restructuring with a single official creditor, and then negotiate between bondholders and commercial creditors.
The debt restructuring process based on a common framework is closely intertwined with the implementation of the IMF programme by debtor countries.
Rome Declaration on Debt
The African Union's Lomet Debt Declaration, adopted on May 15, settled “to advocate for reforming the G20 common framework by establishing a universally accepted methodology for the comparability of treatment.”
Togo's president Faure Gnassingbé said Africa is spending billions of dollars on debt needed to provide services such as healthcare.
“Today, we are witnessing the depletion of foreign aid. That's why we cannot continue to use the G20 common framework. We need a new standard. Africa needs a new doctrine of debt,” he said.
Gnassingbé said the US will move to fundraising the African Development Fund, the continent's concession arm (AFDB), awakening call for prioritizing debt sustainability and rethinking debt management.
In a February analysis of the Common Framework, ThinkTank ODI said, “While we have achieved substantial debt relief, these restructurings present an important challenge as to how modern restructuring in low and middle-income countries work.
Among other measures, he said that the framework needs “faster adjustment, transparency and clarity than:”. “Definition of timelines and processes for reconstruction and the comparability of treatments.”
South Africa has made debt solutions one of its priorities, but it holds the revolving presidency of the G20 national group. The African Union joined the bloc as a permanent member in September.
The declaration also outlined measures to resolve current debt challenges. Measures to mobilize new funds while protecting debt sustainability. Commitment to debt restructuring. Commitment to sound debt management practices. Advocating a legally binding global mechanism at the UN level for debt resolution.
The rising pain
Africa's foreign debt increased more than five times between 2010 and 2020, accounting for almost 65% of GDP in 2023.
According to the African Union, GDP ratio is expected to fall to 60% in 2025, and the continent is facing an escalation of the debt crisis.
Statistics from the IMF and World Bank Debt Sustainability Framework show that the number of African countries with difficult or high-risk debt has increased from nine in 2012 to 25 in March 2025.
AU Agricultural Commissioner Moses Vilakati said a common position on debt must be built on the basis of sound, aggressive and transparent debt management at the national level.
“We must strengthen our legal and institutional frameworks for borrowing, ensure a strict analysis of our terms of use, and instill productive investments that will align all new obligations closely, generate revenue and strengthen our ability to pay back,” he said.
“Strengthening transparency and disclosure of debt data is not merely a technical requirement, but a governance requirement that promotes accountability and enables informed decisions by Congress and citizens.”
Discussed Credit Ratings
The African government also said it was determined to promote the continued establishment of Pan-Africa credit rating agencies, and could counter the punitive assessments the country receives from international rating agencies.
Ghanaian President John Mahama said Africa must speak in one voice to promote fairer global financial rules.
“Credit institutions must adopt methodologies that reflect the structural and potential of reform in Africa.
The representative also called on the International Monetary Fund to urgently reform the special drawing rights (SDR) allocation formula by incorporating the country's liquidity needs beyond the IMF allocation.
