Africa's Evolving Debt Situation

Addis Ababa, Ethiopia, 27 January2026

The African Union Commission (AUC) Commissioner for Economic Development, Trade, Tourism, Industry and Minerals (ETTIM) H.E. Francisca Tatchouop Belobe held a meeting with H.E. Hailemariam Desalegn, former Prime Minister of Ethiopia, at the African Union Headquarters to discuss Africa’s evolving debt situation and the African Leaders Debt Relief Initiative (ALDRI).

In her remarks, the Commissioner underscored the severity of Africa’s current debt situation and the growing pressure that high debt service costs are placing on national revenues and fiscal space. She called for concerted and coordinated action by all stakeholders to advance credible and effective debt resolution mechanisms that respond to different creditor categories, including official bilateral, multilateral, and private creditors.

H.E. Hailemariam Desalegn commended the African Union’s leadership in advancing the continental debt agenda and noted that the continent’s worsening debt dynamics were a key motivation behind establishing ALDRI. He emphasized that the Initiative was created to elevate Africa’s debt crisis to the highest political level, mobilize coordinated advocacy, and press for timely, comprehensive debt relief and reforms that can restore fiscal space, protect development gains, and support sustainable repayment capacity across the continent.

Building on this, the discussion stressed that creditors must be presented with a clear and compelling case that debt relief is not optional but necessary. H.E. Hailemariam emphasized that without timely debt relief, African countries will struggle to invest in growth-enhancing priorities that ultimately underpin their ability to service obligations sustainably. In this context, he argued that debt relief should be framed as a mutual interest (“win–win”): prolonged economic strain increases repayment risk, whereas timely relief can stabilize economies, revive growth, and improve repayment prospects over time.

The meeting further noted that Africa’s debt distress has implications beyond national borders. H.E. Hailemariam cautioned that prolonged instability and constrained growth can fuel wider global pressures, including increased irregular migration and other cross-border challenges, and reiterated the importance of creditors and the international community to consider the broader costs of inaction, not only financially, but also in terms of regional and global stability.

During the engagement, the AUC presented the Common African Position (CAP) on Debt, describing it as a unified continental framework aimed at strengthening Africa’s coordination and influence in global debt discussions, advancing reforms for more timely, predictable, and development-oriented debt resolution, reducing borrowing costs by addressing drivers of Africa’s risk premium, and expanding access to sustainable financing and appropriate liquidity/refinancing solutions.

The AUC also highlighted the African Debt Management Mechanism (ADMM) as a critical enabling output under the CAP on Debt, intended to strengthen debt monitoring and transparency, enhance early warning and risk monitoring, facilitate peer learning and coordination among Member States, and support more effective continental engagement on debt-related issues.

As a keyway forward, the Commissioner committed to organize a continental conference on debt in the first quarter of 2026, focusing on practical modalities for implementing the CAP on Debt. She requested H.E. Hailemariam Desalegn’s support in encouraging Heads of State and Government to ensure appropriate high-level representation, proposing a Presidential-level conference to secure the political momentum needed to advance commitments and accelerate implementation. She proposed to commence preparations immediately, positioning the conference as an initial joint activity to be undertaken in coordination with ALDRI.

The Commissioner also emphasized the need for sustained collaboration between the AUC and ALDRI beyond the conference, including continued engagement on debt-related reforms and financing issues, even where global attention may shift. She further underscored that this partnership should extend to emerging global initiatives, particularly the establishment of a Borrowers’ Club, and emphasized the importance of both the AUC and ALDRI actively participating in the processes leading to its establishment.

The meeting further highlighted the need to strengthen AUC internal capacity to deliver on the continental debt agenda, particularly implementation of the CAP on Debt. In this regard, the establishment of a dedicated debt management team/unit within ETTIM, mandated to coordinate debt-related work and drive CAP implementation was proposed, and the Commissioner requested H.E. Hailemariam Desalegn’s support in engaging current Heads of State and Government to elevate and prioritize public debt resolution as a key continental policy imperative.

Both parties reaffirmed the urgency of Africa’s debt challenges and agreed to deepen collaboration going forward, combining ALDRI’s political advocacy and convening power with the AU’s technical leadership and implementation mandate under the CAP on Debt.

African Union Commission