Sovereign Debt

Following its 2020 default on its US$42.5 million Eurobond payment, Zambia became the first African country to experience a sovereign default during the COVID-19 pandemic. Since then, it has been engaged in a protracted effort to restructure its debt, notably under the G20 Common Framework. This Update explores the divergent positions in this dispute and situates the debate within the broader context of the evolving role of regional multilateral development banks in sovereign debt restructuring. It will also examine Zambia’s strategy of third-party subrogation of Afreximbank’s debt and assess whether it offers a viable path forward in resolving its debt crisis and furthering the relevance of African Multilateral Development Banks in the long-term.

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. Focusing in particular on Kenya, Zambia, Zimbabwe, Mozambique, Nigeria and Senegal, the AfSDJN will also amplify African voices and decolonize narratives on African sovereign debt . Its activities include producing research outputs to enhance the network’s advocacy interventions. It also seeks to create awareness on and elevate the priority given to sovereign debt and other economic justice issues on the African continent and beyond throughout 2021.

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. Focusing in particular on Kenya, Zambia, Zimbabwe, Mozambique, Nigeria and Senegal, the AfSDJN will also amplify African voices and decolonize narratives on African sovereign debt . Its activities include producing research outputs to enhance the network’s advocacy interventions. It also seeks to create awareness on and elevate the priority given to sovereign debt and other economic justice issues on the African continent and beyond throughout 2021.

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. Focusing in particular on Kenya, Zambia, Zimbabwe, Mozambique, Nigeria and Senegal, the AfSDJN will also amplify African voices and decolonize narratives on African sovereign debt . Its activities include producing research outputs to enhance the network’s advocacy interventions. It also seeks to create awareness on and elevate the priority given to sovereign debt and other economic justice issues on the African continent and beyond throughout 2021.

According to Nigeria’s Debt Management Office (DMO), as of the second quarter of 2025, Nigeria's total public debt reached ₦152 trillion (US$190 billion), marking an increase of ₦3 trillion compared to the first quarter of the year. This debt is made up of ₦80.55 trillion (US$ 100.69 billion) in domestic obligations and ₦71.84 trillion (US$89.8 billion) in external liabilities, reflecting both federal and subnational borrowing. The growth in total debt, though significant in nominal terms, is contextualized by projections from the World Bank, which indicate that Nigeria’s debt-to-GDP ratio may decline below 40% by the end of 2025 if current trends in economic growth continue. This potential improvement in debt sustainability reflects an expectation that increased economic activity, improved revenue collection, and a moderate fiscal deficit could help stabilize the country’s debt relative to its GDP. Nevertheless, the sheer magnitude of the debt underscores the ongoing fiscal pressures facing Nigeria and raises questions about the effectiveness of current debt management strategies.

Malawi is facing a period of heightened fiscal and economic uncertainty, with rising debt pressures coinciding with a politically significant moment following the return of President Lazarus Mutharika. On the 4th of October 2025, President Mutharika was sworn in as Malawi’s 7th President, taking over from ex-President Lazarus Chakwera. This debt update examines Malawi’s current political and economic landscape, and the fiscal and debt sustainability challenges President Mutharika has inherited. Further, the update highlights perspectives from the IMF and analysts, as well as the evolving role of China in Malawi’s borrowing framework. Drawing solely from recent reporting and analysis, the update highlights both the opportunities and risks that the country faces as it navigates this complex macroeconomic environment.

Kenya’s proposed debt-for-food swap represents a strategic convergence of fiscal reform and humanitarian need, offering a potentially transformative pathway to ease macroeconomic pressure while addressing food insecurity. However, the promise of such innovative instruments cannot be realized without robust transparency and public accountability. The government’s vague references to “advanced stages” of negotiation, coupled with the absence of clear details on the structure, costs, and stakeholders involved, undermine public trust and violate the principles of good governance. As Afronomicslaw’s case before the EACJ highlights, transparency is not a procedural formality, it is a democratic imperative. Without full disclosure and meaningful public participation, the true benefits of debt swaps cannot be assessed, and the risk of mismanagement or corruption remains high. Sustainable financing must be matched by sustainable governance where citizens are informed, engaged, and empowered to shape the decisions that affect their future.

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. Focusing in particular on Kenya, Zambia, Zimbabwe, Mozambique, Nigeria and Senegal, the AfSDJN will also amplify African voices and decolonize narratives on African sovereign debt . Its activities include producing research outputs to enhance the network’s advocacy interventions. It also seeks to create awareness on and elevate the priority given to sovereign debt and other economic justice issues on the African continent and beyond throughout 2021.

In conclusion, Zambia's journey toward economic recovery, guided in part by its IMF-supported programme, has been marked by both notable achievements and persistent challenges. The "broadly satisfactory" performance and positive forecasts from institutions like Moody's underscore the country's commitment to fiscal and structural reforms, with important milestones already achieved in debt restructuring and economic stabilization. However, the path forward requires unwavering dedication, particularly in addressing persistent issues such as overdue tax revenues and delayed structural reforms. By maintaining fiscal discipline, especially in the lead-up to the 2026 elections, and continuing to implement the ambitious reforms outlined by the IMF, Zambia can strengthen its economic resilience and transform its cautious optimism into tangible, long-term prosperity. The successful finalization of all debt-restructuring agreements in a transparent manner will be the final and critical step in cementing a stable foundation for sustained inclusive growth.

In conclusion, Côte d'Ivoire's recent Samurai bond issuance exemplifies a crucial and growing trend among African governments: the strategic diversification of financing sources to mitigate risks associated with dollar volatility. While this move away from single currency dependence is prudent, it simultaneously underscores an increasing reliance on capital markets for funding. Despite Côte d'Ivoire's commendable fiscal performance, including its successful CFA franc-denominated issuance and a modest Samurai bond coupon, continuous and rigorous monitoring of its sovereign debt fundamentals remains paramount to ensure sustained fiscal health and responsible financing. Further, this trend must be carefully monitored for its potential to continue piling on unsustainable debt for those countries that have embarked on diversifying their creditor base.