Africa Resolves To Reform G20 Debt Framework At Major Gathering

At the first-ever African Union Conference on Debt in Lom, policymakers resolved to reform the G20 Common Framework, the debt relief effort forged during the Covid-19 crisis.

The G20 Common Framework has been used for Ghana and Zambia's debt restructuring processes but critics say it is slow, creditor-driven and no longer fit for purpose.

The framework aims to coordinate official bilateral creditors, including Paris Club countries and China, to negotiate debt restructurings with a single official creditor committee, followed by negotiations with bondholders and commercial creditors.

A debt restructuring process under the Common Framework is closely intertwined with the implementation by a debtor country of an IMF programme.

The African Union Lom Declaration on Debt, adopted on 15 May, resolved "to advocate for reforming the G20 Common Framework by setting up a universally accepted methodology for comparability of treatment, enhancing transparency and inclusivity amongst stakeholders during restructuring".