A new joint report by Development Reimagined, the African Center for Economic Transformation (ACET), and AfriCatalyst, explores how African countries can enhance their agency in the global financial system through better borrower coordination.
For decades, global debt and finance structures have been designed in favor of creditors, leaving borrowing countries, and especially those in Africa, at a disadvantage.
This report highlights historical efforts and challenges faced by African borrowers to collaborate in securing fairer debt terms, accessing affordable financing, and advocating for systemic changes in the global financial architecture.
It identifies that African finance ministries and debt offices have engaged with – in the past and present – a whopping 32 different borrower coordination initiatives, all with different emphasis, objectives and memberships, spanning formal partnerships, advocacy platforms, and capacity-building initiatives.
The report analyses these 32 initiatives and finds that:
● While creditors have long coordinated through mechanisms like the Paris Club, despite the existence of these 32 initiatives African borrowers today lack similar structured platforms to negotiate collectively;
● Current borrower coordination efforts are very fragmented, with overlapping initiatives that need better alignment to maximize impact;
● The vast majority of existing borrower coordination efforts include creditors in the room, which reduces the scope for frank exchange and strategic engagement by borrowers;
● Strengthening borrower coordination could lead to more favorable debt restructuring terms, increased access to concessional finance, and a stronger African voice in global financial decision-making;
● A structured Borrower Coordination Community of Practice could enhance knowledge-sharing and negotiation capacity among African finance ministries and debt management offices.
Recommendations
The report urges African governments, financial institutions, and development partners to:
● Expand capacity-building programs targeted directly at African finance officials in debt negotiation and management.
● Create safe spaces for borrowers to share insights and strategies away from creditor influence.
● Align and merge overlapping borrower coordination initiatives to enhance efficiency.
● Identify champions and advocates, such as influential policymakers and economists to drive borrower coordination efforts.
This research is a call to action for African policymakers and institutions to take the lead in shaping the continent’s financial future as stronger borrower coordination is not just an option but a necessity for fairer, more sustainable global finance.
To access the full report, click here.
February 2025
