Antananarivo becomes the continent’s debt observatory
For three days in late June the volcanic highlands of Madagascar hosted an unusually frank conversation about money. Governors of central banks, chief executives from Abidjan to Addis Ababa and policy advisers convened under the auspices of the Club des Dirigeants de Banques et Établissements de Crédit d’Afrique. Their stated purpose was austere—“The management of public borrowing in Africa: challenges and solutions proposed by banks and central banks”—yet the atmosphere was anything but technocratic. Rising debt servicing costs have turned the subject into an urgent geopolitical matter, and delegates knew that their diagnosis could shape the tenor of next October’s annual meetings of the World Bank and the International Monetary Fund.
A debt curve steepened by exogenous shocks
According to fresh IMF datasets, the ratio of African public debt to GDP climbed from 38.4 percent in 2010 to roughly 67.5 percent this year, eclipsing the pre-relief levels of the late 1990s. Nominal servicing costs soared from 61 billion dollars to an estimated 163 billion in the same period. While the pandemic’s fiscal cushions and the commodity price roller-coaster aggravated balances, the forum’s background papers stressed structural drivers: the swift expansion of Eurobond issuances since 2014, the limited depth of domestic capital markets and the still-modest tax-to-GDP ratio that averages 16 percent (AfDB Statistical Yearbook 2023). Delegates emphasized that hefty external coupons leave less room for strategic outlays on infrastructure, health and food security, areas already strained by climate volatility.
Madagascar showcases the arithmetic of restraint
Host nation Madagascar, whose public debt remains below 55 percent of GDP, offered a case study in calibrated borrowing. Central-bank governor Aivo Andrianarivelo reminded peers that the crucial variable is not the stock of debt per se but the denominator—an expanding, diversified GDP. He argued that concessional financing blended with productivity-enhancing investments can lower the relative burden, a point corroborated by World Bank Growth Analytics released in May. Delegates noted that Antananarivo’s expanding vanilla and graphite exports have undergirded a cautious draw-down of multilateral loans without endangering fiscal sustainability.
Congo-Brazzaville and the CEMAC discipline template
Beyond the island’s shores, several governments have quietly tightened belts. Congo-Brazzaville, for instance, channeled hydrocarbon windfalls into a sinking fund overseen by the regional central bank, BEAC, thereby stabilising its debt-to-GDP ratio below CEMAC’s 70 percent convergence threshold. The Ministry of Economy emphasises predictable quarterly oil-revenue auctions and has heightened transparency through publication of medium-term debt strategies, an approach welcomed by rating agencies as a sign of fiscal prudence (Moody’s Sovereign Outlook 2024). Participants in Antananarivo cited the policy mix as evidence that commodity-rich states can insulate budgets from price gyrations while honouring social commitments laid out in the country’s Development Plan 2022-2026.
Innovative instruments meet governance realities
If prudence is part of the remedy, the other half rests on innovation. Forum chair Ngueto Tiraina Yambaye floated the idea of pan-African sustainability-linked bonds denominated in local currency but guaranteed by a basket of regional reserves, thereby reducing exchange-rate risk. The African Export-Import Bank shared pilot results of a debt-for-climate swap in Gabon that freed budgetary space for marine conservation. Several francophone delegates advocated the expansion of the Regional Stock Exchange in Abidjan to mobilise diaspora savings. Yet speakers cautioned that such sophistication will attract investors only if countries continue to reinforce data integrity, adopt collective-action clauses and submit to peer review under the African Peer Mechanism.
Multilateral recalibration and the G20 chessboard
The conversation inevitably drifted toward the international architecture. Officials from the IMF’s African Department hinted that ongoing talks within the G20 on the Common Framework for Debt Treatment may yield clearer timelines, but stressed that domestic resource mobilisation remains indispensable. The African Development Bank, which has already channelled 667 million dollars of recycled Special Drawing Rights, encouraged states to pursue credit-enhancement facilities rather than blanket moratoria, arguing that reputational costs of default outweigh short-term relief. In the corridors, European bankers acknowledged that a credible continent-wide credit market would serve their own portfolio-diversification needs, suggesting a rare alignment of interests.
Toward a doctrine of smart borrowing
By the time the flight path over the Indian Ocean glittered under the June sun, delegates seemed to converge on a sober consensus. Africa’s development imperative requires capital, yet the price of that capital must be weighed against its catalytic impact. Countries such as Congo-Brazzaville, Rwanda and Botswana exemplify a doctrine whereby borrowing is tethered to clearly monetisable projects, parliamentary oversight and conservative debt thresholds. As one Central African governor put it over coffee, the continent can afford to borrow, but it can no longer afford to borrow blindly.
