The Governor of the Bank of Ghana, Dr. Johnson Asiama, is urging the International Monetary Fund (IMF) to ensure that the debt sustainability framework remains fit for purpose and effectively captures the unique vulnerabilities of developing countries, including climate-related debt risks and new debt instruments.
He emphasized the importance of strengthening the debt sustainability framework to proactively prevent unsustainable debt accumulation without unduly limiting access to much-needed development assistance.
Speaking on behalf of African Governors at the 2025 African Consultative Meeting during the ongoing IMF/World Bank Spring meetings in Washington, DC, Dr. Asiama said refining the IMF’s debt sustainability toolkit is critical in this regard.
He added, “We urge the IMF to enhance its risk assessment tools and early warning systems to timely identify potential debt sustainability issues. We expect the ongoing review of LIC DSA to take stock of shortcomings and address them.”
He also urged the IMF to continue leading debt restructuring and debt relief efforts.
“While we appreciate the work of the Global Sovereign Debt Roundtable (GSDR) and G20 Common Framework, the ongoing high debt vulnerabilities in developing countries, especially in Africa, call for a more comprehensive debt relief strategy. Streamlining processes, enhancing debt transparency and reporting, and incentivizing private creditor participation in the Common Framework are crucial for fostering confidence and encouraging early engagement from members,” he pointed out.
Additionally, Dr. Asiama noted that Multilateral Development Banks’ significant exposure to debt-vulnerable countries necessitates deeper discussions on fairer debt treatment across different creditors and additional financing support.
He called on the IMF to use its convening powers to drive this dialogue at the GSDR.
Dr. Asiama concluded by stressing the importance of enhancing policy coordination among international financial institutions (IFIs), urging the IMF, other IFIs, and regional bodies to better coordinate and align their financial and technical support to developing countries, considering their diverse needs and capacities.
“Promoting regional cooperation to address common challenges and capitalize on collective strengths is paramount. Given the debt vulnerabilities exacerbated by climate change, we call for enhanced collaborative efforts. This includes proposing ambitious yet achievable and monitorable concessional financing options, establishing joint financing mechanisms, and developing common policy frameworks,” he said.
Half of SSA at High Risk or Already in Debt Distress
Meanwhile, Dr. Asiama noted that half of Sub-Saharan African countries are at high risk of, or already in debt distress by the end of 2024. This severely constrains fiscal space for essential social and development spending, and hinders progress towards achieving the SDGs.
He expressed particular concern about the per capita public expenditure on interest payments in Africa, which has surpassed spending on health and education, exacerbated by declining overseas development assistance.
However, he stated that African Governors are committed to proactive debt management, enhancing revenue mobilization, and rationalizing expenditures to restore fiscal and debt sustainability while implementing policies to promote durable economic growth.
But these efforts require stepped-up international cooperation and support from development partners, including the IMF.
The theme for the occasion was “Debt Vulnerabilities in Developing Countries—a Key Challenge for Achieving the Sustainable Development Goals (SDGs).”
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