The Governor of the Bank of Ghana, Dr. Johnson Asiama, has made a strong case for the International Monetary Fund (IMF) to overhaul its debt sustainability framework to better serve the realities and challenges of developing countries — especially in Africa.
Speaking on behalf of African central bank governors at the 2025 African Consultative Meeting during the IMF/World Bank Spring Meetings, Dr. Asiama emphasized that the current debt assessment tools are not fully equipped to address the complex debt landscape shaped by climate risks, fragile economies, and evolving financing instruments.
“We must ensure the debt sustainability framework is not just technically sound but also practically relevant. It must evolve to reflect the growing vulnerabilities of developing countries, including the climate crisis,” he stated.
Call for Fairer and Faster Debt Solutions
Dr. Asiama pointed out that Africa’s debt challenges require more than monitoring — they demand bold restructuring and equitable treatment across all creditors, including private lenders. While commending the Global Sovereign Debt Roundtable and the G20 Common Framework, he argued that progress has been slow and insufficient for countries already in deep fiscal distress.
“We need to streamline processes and enhance transparency in the debt architecture. Private sector participation must be incentivized, and the framework must be efficient enough to trigger early and fair engagement,” he added.
He urged the IMF to use its global influence and convening power to push for a reformed, inclusive system that prioritizes development goals alongside debt sustainability.
Africa’s Debt Reality: A Risk to Development
As of the end of 2024, half of Sub-Saharan African countries are either in debt distress or at high risk, according to Dr. Asiama. The financial pressure is so severe that many governments now spend more on interest payments than on health and education.
“This is unacceptable. We cannot talk about achieving the Sustainable Development Goals when debt service consumes the resources meant for people’s well-being,” he lamented.
He noted that the burden is exacerbated by falling overseas development assistance and limited fiscal space — making coordinated international action all the more urgent.
Pushing for Regional Collaboration and Climate-Conscious Financing
Dr. Asiama also pushed for enhanced collaboration among multilateral development banks, international financial institutions (IFIs), and regional bodies. He called for the creation of joint financing mechanisms, concessional financing tools, and climate-sensitive policy frameworks to support vulnerable nations.
“We must promote regional cooperation, especially as climate change deepens our vulnerabilities. The debt crisis cannot be viewed in isolation from the climate and development crises,” he said.
Africa’s Commitment, But Support Is Needed
While affirming the commitment of African leaders to responsible debt management, revenue generation, and expenditure reform, Dr. Asiama insisted that these domestic efforts must be matched with increased international cooperation.
“African governments are ready to do the hard work. But we need fair systems, inclusive frameworks, and meaningful global support to restore debt sustainability and keep development on track,” he concluded.
The address aligned with the event’s theme: “Debt Vulnerabilities in Developing Countries – A Key Challenge for Achieving the Sustainable Development Goals.”
