Opening Statement

by

H.E. Mr. Moses Vilakati, Commissioner for Agriculture, Rural Development, Blue Economy and Sustainable Environment (ARBE), Acting Commissioner for Economic Development, Trade, Tourism, Industry and Minerals (ETTIM)

Delivered at the African Union Debt Conference

Lomé, Togo

12-14 May 2025

Held under the theme:  

 “Africa's Public Debt Management Agenda: Restoring and Safeguarding Debt Sustainability”

Your Excellency, Mr. Faure Essozimna Gnassingbé, President of the Council of the Republic of Togo,

Your Excellency Mr. John Dramani Mahama, President of the Republic of Ghana,

Your Mr. Claver Gatete, Executive Secretary of the United Nations Economic Commission for Africa,

Honorable Ministers, Central Bank Governors,

Representatives of international organisations,

Ambassadors,

Distinguished Delegates,

Ladies and Gentlemen,

On behalf of the Chairperson of the Africa Union Commission, H.E. Mr. Mahmoud Ali Youssouf, I wish to welcome you all to this African Union Conference on Debt in this beautiful city of Lomé.

I thank you sincerely for taking time out of your busy schedules to be here today. This is an indication of your commitment and support for the realization of the Vision and Aspirations of Agenda 2063, our development strategy towards unity, peace and shared prosperity. 

I wish to further take this opportunity to thank the President of the Council of the Republic of Togo, H.E. Mr. Faure Essozimna Gnassingbé and his Government, as well as the People of Togo for the warm welcome and hospitality accorded to all delegations.

Your acceptance to host this first edition of the African Union Conference is the demonstration of your unwavering support and commitment to propel Africa in its next development stage as a prosperous and socially inclusive continent.

Excellencies, distinguished Ladies and Gentlemen,

It is with a deep sense of urgency and shared purpose that I stand before you today at this pivotal African Union Conference on Debt in Lomé. Our gathering here, at the highest level of African leadership, is a testament to the critical nature of the debt challenges confronting our continent and our collective resolve to address them head-on. The theme guiding our discussions – "Africa's Public Debt Management Agenda: Restoring and Safeguarding Debt Sustainability" – is not just pertinent; it is a matter of economic survival and a prerequisite for realizing the Africa We Want, as envisioned in Agenda 2063.

For far too long, the narrative of Africa's progress has been shadowed by the growing burden of debt. Over the past decade, Africa's total debt stocks have more than doubled. While external debt stood at approximately 24.5% of our combined GDP in 2023, this aggregate figure masks the alarming reality for many individual nations where debt-to-GDP ratios are significantly higher. The number of African countries in or at high risk of debt distress has surged dramatically, with recent data indicating that as many as 20 low-income African countries face bankruptcy or high debt distress risk.

The drivers of this escalating crisis are complex and multifaceted. External shocks – from the lingering socio-economic impacts of the COVID-19 pandemic and the ripple effects of geopolitical conflicts to volatile commodity prices and tightening global financial conditions – have severely constrained our fiscal space. Rising global interest rates have significantly increased borrowing costs, particularly as the composition of Africa's debt has shifted.

We have seen a notable move away from traditional concessional financing towards more expensive commercial borrowing, which now accounts for over 43% of Africa's external debt. Non-Paris Club bilateral creditors have also become increasingly significant players, with one country alone holding a substantial portion of this bilateral debt.

The consequence is clear and devastating: an increasing share of our national revenues is being diverted to debt service payments. Alarmingly, many African countries are now spending more on servicing debt interest – let alone principal repayments – than on critical sectors like healthcare and education. This is not merely an economic challenge; it is a human development crisis, hindering our ability to invest in our people and build resilient economies capable of withstanding future shocks.

We have observed and, in some cases, engaged with international initiatives aimed at providing debt relief, notably the G20 Common Framework for Debt Treatment. While the intention behind the Common Framework to provide a coordinated restructuring mechanism for eligible countries is acknowledged, its implementation has revealed significant shortcomings. The process has been characterized by frustrating delays, complex procedures, and insufficient debt relief to truly restore sustainability. The lack of timely and equitable participation from all creditor classes, particularly private creditors, and the absence of an automatic debt service standstill during negotiations have undermined its effectiveness and discouraged some countries from utilizing it despite their evident need.

Excellencies, distinguished Ladies and Gentlemen,

While we continue to advocate for necessary reforms to the global debt architecture and existing mechanisms like the Common Framework – pushing for greater speed, transparency, comparability of treatment, and expanded eligibility – we must also look inwards. Our destiny lies in our hands. This conference in Lomé is our opportunity to forge a strong, unified, and action-oriented African Common Position on Debt.

This Common Position must be built on the bedrock of sound, proactive, and transparent debt management at the national level. We must strengthen our legal and institutional frameworks for borrowing, ensuring rigorous analysis of terms and conditions, and aligning all new debt strictly with productive investments that generate returns and enhance our repayment capacity. Enhancing debt data transparency and disclosure is not just a technical requirement; it is a governance imperative that fosters accountability and allows for informed decision-making by parliaments and citizens alike.

Crucially, we must redouble our efforts on Domestic Resource Mobilization (DRM). Relying less on external borrowing requires us to effectively harness our own wealth. This means broadening our tax bases, improving the efficiency and fairness of tax collection, and decisively combating illicit financial flows that drain billions from our economies annually. The operationalization of the AfCFTA is a powerful tool in this regard, fostering regional value chains and expanding our internal markets, which will ultimately strengthen our revenue bases. We must also explore innovative ways to tap into domestic savings, including leveraging our growing pension and insurance funds for long-term development financing.

Furthermore, we must champion innovative financing mechanisms that offer alternatives to traditional debt. Initiatives such as debt-for-climate or debt-for-nature swaps, performance bonds linked to achieving specific development or climate goals, and the strategic use of green and blue bonds can provide much-needed fiscal space while simultaneously advancing our sustainable development and climate action agendas. Leveraging digital public infrastructure can also significantly enhance the efficiency and transparency of both DRM and public expenditure management.

Finally, underpinning all our efforts must be an unwavering commitment to good governance and the fight against corruption. Weak governance structures and lack of transparency are significant drivers of unsustainable debt. Strengthening our institutions, promoting accountability, and ensuring that public resources, including borrowed funds, are utilized efficiently and effectively for the benefit of our people are non-negotiable pillars of a sustainable debt future.

Excellencies, distinguished Ladies and Gentlemen,

The path ahead is challenging, but it is not insurmountable. By strengthening our national debt management, aggressively pursuing domestic resource mobilization, embracing innovative financing, driving economic transformation through initiatives like the AfCFTA, advocating for a fairer global financial system, and upholding the highest standards of governance, we can restore and safeguard Africa's debt sustainability.

This conference is a critical step in that journey. Let us leave Lomé with a clear, unified African voice and a concrete plan of action to ensure that debt becomes a tool for development, not a trap that stifles our progress.

The African Union Commission is committed to supporting Member States in implementing the outcomes of this conference and advancing our shared agenda for a prosperous and debt-sustainable Africa.

I thank you for your kind attention.