AFRICAN FORUM AND NETWORK ON DEBT AND DEVELOPMENT - DEBT RESTRUCTURING

The shift in the composition of the debt also reflects the changing need for development financing, especially with respect to the Sustainable Development Goals (SDGs) and climate action at the centre of the funding needs of de- veloping countries. [...] THE G20 COMMON FRAMEWORK OF DEBT RESTRUCTURING: THE BASICS The G20 Common Framework for Debt Treatment beyond the DSSI came into force at the expiration of the latter in December 2021 to take up and address the imminent debt crises of low-income coun- tries. [...] Given the bias of credit rating agencies to- ward African countries and the cost of downgrades, the G20 CF is a barrier rather than a facilitator of debt restructuring in Africa, and the benefits of joining are minuscule compared to the cost. [...] Despite this limitation, the Joint World Bank and IMF Debt Sustainability Frameworks remain the dominant and only approach to evaluating and managing public debt in Africa and among the various member states of the Fund and the Bank. [...] Expansion of the G20 CF be- yond these constraints requires careful redrafting of the con- ditions enshrined in the Paris Club (2020) and a commitment among creditors to expand the scope and coverage of the debt relief beyond the DSSI.