Yemi Osinbajo, Former Vice President of Nigeria and other former African Heads of State and Government have signed the Cape Town Declaration, calling for the critical need for debt relief for highly indebted nations and advocating for lower borrowing costs for all developing countries.
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Eight former African heads of state and government signed the Cape Town Declaration on Thursday, pressing for urgent debt relief for heavily indebted nations and cheaper borrowing for developing countries.
The signing kicked off the African Leaders Debt Relief Initiative (ALDRI) at a G20 Finance Ministers’ meeting in Cape Town, where South Africa’s G20 Presidency has put debt sustainability front and centre.
The group, chaired by Nigeria’s ex-President Olusegun Obasanjo, includes Joyce Banda (Malawi), Jakaya Kikwete (Tanzania), Ameenah Gurib-Fakim (Mauritius), Macky Sall (Senegal), Nana Addo Dankwa Akufo-Addo (Ghana), Hailemariam Desalegn (Ethiopia), and Yemi Osinbajo (Nigeria’s ex-VP).
They called for a global overhaul of financial systems to ease Africa’s debt load, aligning their plea with the African Union’s Agenda 2063 goals.
“Africa is facing unsustainable debt burdens. It is crucial that we come together to find a solution to this crisis. Africa's future is intertwined with the world's future, and we must work to resolve the debt crisis in order to drive sustainable economic development across the continent,” Obasanjo said in a statement by the ALDRI.
"In 2023, low- and middle-income countries collectively spent $1.4 trillion (R26trl) servicing foreign debt, with interest payments reaching a staggering $406 billion. Africa, in particular, is facing disproportionately high borrowing rates, making it harder to invest in the continent’s growth and development," the statement said.
Sall said: “African countries are burdened with disproportionately high borrowing rates and debt costs, often requiring repayment within a short timeframe. A comprehensive solution to the debt crisis must be a priority for all. The resolution of this global issue benefits everyone, everywhere.”
Banda added a stark figure: “Countries on the frontlines of the development crisis… will need to invest up to $6.4 trillion annually to achieve sustainable development [by 2030]. However, this goal remains unaffordable given their overwhelming debt servicing obligations.”
Kikwete blamed rising interest rates and a strong dollar for worsening dollar-based debt woes, saying, “A global solution to this crisis is not only vital for our economies but will also benefit everyone around the world.”
Akufo-Addo pointed to Ghana’s plight: “Ghana's situation underscores the need for debt relief that is both fair and needs-based. Countries in debt distress must receive the necessary support to invest in sustainable solutions for their people.”
Gurib-Fakim added that the Global South has suffered under crippling debt for far too long, saying, "Small Island Developing States (SIDS), like Mauritius, are particularly vulnerable to the climate crisis. Many of these nations are drowning in debt as they are forced to address the devastating impacts of climate change and rising sea levels.”
Desalegn urged teamwork: “Multilateral cooperation between countries, multilateral banks, the private sector, and other stakeholders is essential for reforming the global debt system. Africa must have a voice in shaping these reforms.”
Osinbajo observed, “More than half of African countries now allocate more funds to interest payments than to healthcare, leaving them with little fiscal capacity to invest in sustainable development. Immediate action is critical, and a breakthrough must be reached as the G20 meets this year.” With South Africa steering the G20, the Declaration aims to spotlight Africa’s $406m interest burden against a $1.4bn debt pile, pushing for relief as the 2025 summit looms. ALDRI vowed to keep pressing stakeholders for reforms to bolster economic resilience continent-wide.
The call comes amid shifting geopolitical alliances as newly appointed US President Donald Trump ushers in disruption in global trade ties.
Citadel Global Director, Bianca Botes, said in a note on Thursday, "The success of South Africa's G20 presidency in 2025 and the future relevance of the G20 also hang in the balance, as the US refuses to participate while SA – and the global south – are trying to rally global leaders on pressing issues such as climate change, economic inequality, and technological disruption. These are the gravest issues of our time and need effective international cooperation to be addressed. The future cohesion and effectiveness of the G20 as a forum for global economic governance are now of serious concern. In addition, several countries are likely to enter into trade talks with new potential trading partners in 2025, which could cause current supply chains to diverge even further."
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