By Christian.conteh@awokonewspapersl.com
Freetown, Sierra Leone- African economists and policymakers have called for urgent reforms to the global financial architecture, highlighting the stark disparities that force African nations to pay up to five times more in loan interest rates on capital markets than when borrowing from multilateral development banks.
This call to action emerged from a high-level consultative meeting of the G20 Africa Expert Panel held on the sidelines of the African Development Bank’s (AfDB) 2025 Annual Meetings. The session was chaired by Trevor Manuel, former South African finance minister and current Chairperson of the Board of South African financial services giant Old Mutual.
The Africa Expert Panel, which advises on integrating Africa’s development priorities into the G20 agenda, includes leading voices such as AfDB Vice President and Chief Economist Dr. Kevin Urama, Nobel laureate and MIT Professor Esther Duflo, former World Bank Chief Economist François Bourguignon, and UN Economic Commission for Africa’s Chief Economist Hanan Morsy.
Panelists outlined four strategic priorities for the continent: A just and urgent response to the climate crisis, Debt sustainability for low-income countries, Financing a just energy transition and Harnessing Africa’s vast critical mineral resources for inclusive development.
Dr. Urama, speaking on behalf of Chair Trevor Manuel at the opening session, underscored the structural inequities plaguing African economies. “African countries pay about 500 percent more in loan interests when they borrow from the global capital markets compared to when they borrow from Multilateral Development Banks such as the African Development Bank Group or the World Bank,” he said. “Debt service costs in Africa could reach $89 billion in 2025, diverting resources away from investments in education, health and other productive sectors.”
Dr. Patrick Njoroge, former Governor of the Central Bank of Kenya and a panel member, warned that Africa faces a critical juncture. “This is not an African problem; it’s a global system failure,” he stated. “The worst debt crisis in a generation is not measured by debt-to-GDP, but by the crushing trade-off: interest payments over education, over health, over climate resilience.”
Despite having the world’s lowest default rate on long-term infrastructure projects, African countries still lose an estimated $74.5 billion annually due to sovereign risk mispricing—a stark indication of how distorted risk perceptions impede the continent’s progress.
With Africa expected to account for one in four people globally by mid-century, panelists argued for a paradigm shift that transcends charitable aid and embraces policies based on global interdependence and fairness.
This consultative dialogue comes as South Africa prepares to assume the presidency of the G20—the first African country to do so. Its chosen theme, “Solidarity, Equality, and Sustainability,” reflects a commitment to advancing a people-centered and development-focused global agenda that places Africa’s voice at its core.
The Africa Expert Panel aims to continue its advocacy throughout South Africa’s G20 presidency, pushing for more equitable financial mechanisms that support Africa’s long-term growth and resilience. CC/10/6/2025
