Development Reimagined has submitted a formal response to the World Bank and IMF’s consultation on the Low-Income Country Debt Sustainability Framework (LIC-DSF), arguing that while the proposed reforms are meaningful, they do not address a more fundamental issue: the framework’s core architecture no longer reflects how many African sovereigns actually borrow.

At the centre of the submission is a clear proposal, the review should move toward a universal sovereign debt sustainability framework applied to all countries – with a single analytical spine, calibrated to actual financing structures.

The submission highlights three main issues.

First, the performance of the current early-warning system. Since 2018, around 95% of “High Risk” classifications have not been followed by debt distress within a two-year horizon, raising questions about how these signals are interpreted and the potential financing costs they generate for countries that do not experience distress.

Second, a potential circularity issue in the proposed refinement to the Composite Indicator of Debt-Carrying Capacity, where higher borrowing costs may feed back into the assessment itself, potentially reinforcing rather than diagnosing risk signals.

Third, the framework’s limited ability to capture what borrowing actually finances, including infrastructure, productive investment, and natural capital, which are largely absent from the core debt sustainability signal despite their relevance to long-term repayment capacity.

Development Reimagined welcomes the direction of the proposed reforms but argues that they should be seen as an interim step, not the end point.

The broader reform question remains open: how to build a sovereign debt framework that reflects today’s financing realities more accurately.

Read the full submission below.