Sovereign Debt

Undoubtedly, this fragile political environment has significant economic implications, including declining investor confidence, disruptions to economic activities, and a worsening fiscal outlook. For ordinary Mozambicans, political instability translates into rising costs of living, limited access to essential services, and growing concerns about economic security. Mozambique's debt situation remains precarious, with the government balancing debt issuance, salary obligations, and governance challenges. While efforts to settle debts and stabilize finances are ongoing, political instability and calls for accountability will be crucial in shaping the country's economic trajectory. The African Sovereign Debt Justice Network (AfSDJN) continues to monitor developments, advocating for the promotion of peace for the creation of a conducive environment for just and transparent debt management processes that prioritize economic justice and sustainable financial governance.

To better address the recurrent sovereign debt crisis many developing countries are facing, the proposals contained in the FfD4 Zero Draft need to be strengthened. This is because proposals to address the debt crisis must recognize that is not an aberration but rather an integral feature of the global financial and debt architecture. The Zero Draft needs to abandon the assumption that the primary reason for this indebtedness is that developing countries have overborrowed. Instead, the proposals in the Zero Draft need to take into account that the debt crisis is symptomatic of deeper structural features and weaknesses both of the global financial and debt architecture as well as of the economies of these indebted countries.

The essay also emphasizes the importance of leveraging regional initiatives. These initiatives provide a complementary layer to global frameworks by fostering context-specific solutions, enhancing coordination among member states, and facilitating the exchange of best practices. For instance, regional bodies could play an essential role in mediating disputes between creditors and debtors and advocating for equitable treatment of African nations in multilateral debt restructuring forums. The Convention would cure this by institutionalizing capacity-building programs through regional debt advisory centers equips nations with the tools to circumnavigate complex debt negotiations.

This essay will harmonize perspectives on responsible sovereign borrowing, re-emphasising the importance of shared responsibilities. It will commence by briefly examining the United Nations Conference on Trade and Development (UNCTAD) Principles on Promoting Responsible Sovereign Lending and Borrowing (“the UNCTAD Principles”) and the Addis Ababa Action Agenda (“the Agenda”). Additionally, the United Nations Department of Economic and Social Affairs (UN DESA) proposals on sustainable and responsible borrowing and lending and debt crisis prevention will be appraised. This analysis will consider the applicability of these principles within the specific context of African countries, considering economic, political, and social realities.

Ghana’s debt situation underscores the critical need for comprehensive domestic legal and policy measures to enhance debt sustainability, strengthen public financial management, and ensure inclusive growth. The new Mahama administration must prioritize systemic reforms that align fiscal policies with long-term economic stability and development goals. More importantly, it must push for the expediting of the debt restructuring efforts under the G20 Common Framework. Over and above, Ghana’s experience, together with those of Zambia and Ethiopia, continue to expose the inadequacies of the Common Framework, demonstrating the need for a new comprehensive, fair, and effective sovereign debt restructuring system based in the United Nations, and that is binding on all creditors, including commercial creditors.

The African Sovereign Debt Justice Network, (AfSDJN), is a coalition of citizens, scholars, civil society actors and church groups committed to exposing the adverse impact of unsustainable levels of African sovereign debt on the lives of ordinary citizens. Convened by Afronomicslaw.org with the support of Open Society for Southern Africa, (OSISA), the AfSDJN's activities are tailored around addressing the threats that sovereign debt poses for economic development, social cohesion and human rights in Africa. It advocates for debt cancellation, rescheduling and restructuring as well as increasing the accountability and responsibility of lenders and African governments about how sovereign debt is procured, spent and repaid.

The News and Events category publishes the latest News and Events relating to International Economic Law relating to Africa and the Global South. Every week, Afronomicslaw.org receive the News and Events in their e-mail accounts. The News and Events published every week include conferences, major developments in the field of International Economic Law in Africa at the national, sub-regional and regional levels as well as relevant case law. News and Events with a Global South focus are also often included.

The News and Events category publishes the latest News and Events relating to International Economic Law relating to Africa and the Global South. Every week, Afronomicslaw.org receive the News and Events in their e-mail accounts. The News and Events published every week include conferences, major developments in the field of International Economic Law in Africa at the national, sub-regional and regional levels as well as relevant case law. News and Events with a Global South focus are also often included.

The African Sovereign Debt Justice Network, (AfSDJN), is a coalition of citizens, scholars, civil society actors and church groups committed to exposing the adverse impact of unsustainable levels of African sovereign debt on the lives of ordinary citizens. Convened by Afronomicslaw.org with the support of Open Society for Southern Africa, (OSISA), the AfSDJN's activities are tailored around addressing the threats that sovereign debt poses for economic development, social cohesion and human rights in Africa. It advocates for debt cancellation, rescheduling and restructuring as well as increasing the accountability and responsibility of lenders and African governments about how sovereign debt is procured, spent and repaid.