Global loan sharks just love our hungry, hungry hippos
Gobble, gobble, gobble – it’s undignified, but who cares, say the gluttonous functionaries
L. Muthoni Wanyeki
As “aid” dwindled, international trade disappointed, and tax earnings underwhelmed, African governments went on a borrowing spree. Our external debt has tripled since 2009, according to the Mo Ibrahim Foundation’s 2024 Financing Africa report.
Typically, governments issue bonds, mostly bought by private creditors in China, the United Kingdom, and Israel. Private creditors, known for high interest rates and no appetite for debt relief, have held the largest share of Africa’s sovereign debt since 2023.
Next is multilateral debt, mainly from the World Bank and the African Development Bank (which we don’t control, despite its name).
Bilateral debt follows, led by China.
By 2023, African countries owed external creditors $685.5-billion and paid $88.7-billion to service that debt – more than a quarter of the continent’s GDP.
The African Forum and Network on Debt and Development reports that 24 of our 54 states (55 if we count the Sahrawi Arab Democratic Republic, which we do) are either in debt distress or at high risk of it. Twenty-five spend more on external debt servicing than on health.
It was about time the African Union held its first debt conference. Yet, the May summit in Lomé, Togo, ended with anaemic recommendations.
Delegates called for a pan-African credit rating agency to counter the (imperialist and racist) bias of existing agencies and make borrowing more affordable. They also urged reforms to the G20 Common Framework for Debt Treatments – the forum for renegotiating sovereign debt – like including private creditors and making its decisions enforceable.
But why would creditors implement reforms to kill their cash cow?
The European Union and the UK recently blocked progress for a United Nations Framework Convention on Sovereign Debt, which sought enforceable global rules for prioritising human rights and basic services over debt servicing. Its derailment says everything about creditors’ interests.
Still, our debt mess isn’t only external.
We would not be here without our government’s complicity and our leaders’ greed. African leaders were not naive about sovereign debt.
Debt restructuring has been done before: in the 1970s and ’80s through the Paris Club; in 1996 through the International Monetary Fund and World Bank; and again in 2001 through the Multilateral Debt Relief Initiative.
Yet governments plunged into the latest borrowing cycle as if money grows on trees. It does – but only for the officials who contract the loans. Kenya’s first Eurobond money vanished into private pockets, leaving citizens on the hook. A treadmill of Eurobonds to repay that missing first one followed. Mozambique’s $1.5-billion “tuna bond” was just as scandalous.
Yet the Lomé summit offered only a token fix: “better legislative oversight”. Ha!
It is hard to take African calls for debt relief seriously when calls for domestic accountability are nowhere near as loud. We love an imperial or neocolonial villain, but it is unproductive to isolate the external sharks from their internal enablers. Debt relief activism must confront domestic grand corruption.
As the book Anatomy of State Capture shows, we must confront the shadow state and its key actors: elites with executive power or proximity to it, who can corrupt others; internal bureaucrats, technocrats, and dealers who know how to bend rules, process bribes, and launder money; external fixers who bring racketeering vision and sniff out public money to siphon; and middlemen, who move the cash.
If we don’t confront them, they gobble, gobble, gobble while we squeeze, squeeze, squeeze. Governments keep saying there is “no money” for healthcare, schools, or jobs – yet highways, trains, and airports appear at triple their real cost.
We celebrate these shiny projects while basic services crumble and average people struggle to get by.
