South Africa will host the first G20 summit on African soil, placing the debt crisis that afflicts many developing nations at the centre of the agenda. Developing countries are now confronting a staggering $31 trillion in global debt—double their share in 2010, according to the United Nations Conference on Trade and Development (UNCTAD). Togolese economist Kako Nubukpo describes this burden as a “snowball effect,” where deficits accumulate and turn into debt.
African economies, with their young populations, need substantial financing for education, healthcare and job creation, yet high debt‑service costs are crowding out these investments. Although the debt‑to‑GDP ratios of many developing nations are lower than those of developed countries, they pay a larger share of their revenues in interest. In sub‑Saharan Africa, public debt stands at 58.5 % of GDP, compared with 117 % in France, 230 % in Japan and 125 % in the United States. Between 2021 and 2023, African governments spent an average of $70 per person on interest payments—more than they allocated to education and health.
This paradox reveals structural fragilities in many developing economies, including weak fiscal capacity and low tax revenues driven by corruption. Average tax revenue in Africa is only 16 % of GDP, versus 32 % in advanced economies. Moreover, many African states run trade and budget deficits because they do not produce what they consume. Experts argue that stronger domestic tax systems must be complemented by a fairer international financial architecture. Osita Chidoka, head of Nigeria’s Athena Centre for Policy and Leadership, stresses that “no country can tax or cut its way out of this crisis alone. Africa must grow out of debt, supported by a fairer global financial system.”
A UNDP report estimates that the way major credit‑rating agencies score African countries costs the continent $74.5 billion in lost annual financing, prompting accusations of structural bias and claims that the system is stacked against African nations. In response, the African Union plans to launch its own rating agency next year. The changing profile of creditors—private lenders now hold 19 % of low‑income country debt—has made restructuring slower and more complex. Experts call for a faster, more robust framework for African debt resolution, with some proposing laws to compel private creditors to join restructuring talks.
The G20 summit in South Africa therefore offers a crucial opportunity for leaders to confront the debt crisis and work toward a more equitable global financial system.
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