Sovereign Debt

Since formally requesting debt treatment in early 2021 under the G20 Common Framework, Ethiopia has faced a protracted and uncertain restructuring five year-process marked by delays, creditor coordination challenges, and mounting economic pressures. The country’s economic vulnerabilities have been exacerbated by conflict, foreign exchange shortages, inflationary pressures, and declining investor confidence. Against this backdrop, the announcement on 3 April 2026 that Ethiopia had reached a debt treatment resolution with China represents a significant development, not only for Ethiopia’s restructuring process but also for broader debates on the effectiveness (or lack thereof) of the Common Framework. This update examines the details of the agreement, situates it within Ethiopia’s broader debt trajectory, and critically assesses what it reveals about the evolving global debt restructuring regime.

Nigeria is once again at a critical juncture in its debt trajectory, as mounting fiscal pressures, rising borrowing costs, and constrained access to conventional financing channels push the government toward increasingly complex and opaque instruments. Recent reports indicate that Nigeria is considering a $5 billion Total Return Swap (TRS) arrangement with First Abu Dhabi Bank, marking a significant shift in its debt management strategy. This development must be situated within a broader pattern of an increasing appetite for this credit derivative in the form of Total Return Swaps. Both Angola and Senegal have in the recent past also been reported to have entered into Total Return Swaps. These developments point to a deepening reliance on financial engineering solutions that may provide short term liquidity but carry significant long-term risks for fiscal stability and public accountability.

Mozambique has entered 2026 with a seemingly positive milestone, having fully repaid its outstanding obligations to the International Monetary Fund (IMF) ahead of schedule. This development, which might ordinarily signal improved fiscal health and strengthened macroeconomic stability, instead unfolds against a backdrop of intensifying domestic debt pressures, constrained fiscal space, and growing socio-economic strain. While authorities have framed the early repayment as evidence of sound financial management and renewed credibility, emerging data suggests a more complex and concerning reality. Domestic borrowing has surged, external financing conditions remain tight, and key development projects face increasing uncertainty. Mozambique’s trajectory mirrors a wider trend across African sovereigns, where headline debt milestones often sit alongside intensifying structural vulnerabilities and fiscal strain. Against this backdrop, this update explores the country’s recent full repayment of its IMF obligations in parallel with rising domestic debt pressures and tightening fiscal space.

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.

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.

In December 2024, Angola stealthily entered into a US$1 billion one-year derivative contract known as a ‘total return swap’ with JP Morgan Securities Plc (“JPM”). The transaction was concluded at a time when Angola’s public debt was approaching 60% of GDP, intensifying scrutiny of non-traditional financing instruments that can generate hidden or contingent liabilities. Uniquely, this agreement unfolded without the usual spectacle of a traditional sovereign financing deal. There was no bond roadshow, no parliamentary debate, and scarcely any press fanfare following the event. This absence of public process meant that neither parliamentary scrutiny nor advance disclosure of potential contingent liabilities accompanied the transaction.

In November 2025, the Government of Libya launched legal action to recover more than US$100 million in unpaid debt from Zimbabwe, adding to the nation’s growing list of creditor disputes as it struggles under a debt burden exceeding US$23 billion. As of September 2025, Zimbabwe's total public and publicly guaranteed debt stock stood at US$23.4 billion, which includes US$13.6 billion in external debt. This update examines Zimbabwe’s renewed sovereign debt challenges through the lens of the ongoing legal dispute with Libya over a US$100 million fuel-related debt originating from a 2001 credit facility, situating the case within Zimbabwe’s broader, long-standing debt crisis and governance weaknesses in public borrowing. The update further explores how the decision by the Libyan Foreign Bank to pursue litigation in the UK High Court reflects wider trends in cross-border sovereign debt enforcement and signals increasing impatience among creditors with unresolved legacy obligations. By connecting the Libyan claim to Zimbabwe’s wider external debt overhang, exclusion from international capital markets, and stalled arrears clearance efforts, the analysis highlights how long-standing sovereign debts continue to constrain fiscal sovereignty, undermine economic recovery, and expose structural weaknesses in debt management.