Bringing the Common African Position on Debt to Life: Why Legal Definitions Matter

By Mary Ongore, Senior Legal Manager, Sustainable Finance

Photo credit: AFRODAD

Africa is currently facing a debt crisis. As of August 2026, the World Bank’s Debt Sustainability Analysis indicates that sixteen African countries were at high risk of debt distress, and seven countries were already in debt distress. This situation has been exacerbated by repeated external shocks, including the COVID-19 pandemic, the Russia-Ukraine war, the Iran conflict, extreme weather conditions, tightening global financial conditions, and persistently high borrowing costs, among others. As a result of unsustainable levels of debt, African countries increasingly experience constraining fiscal space. Valuable government funds are being funnelled to meet debt repayment obligations rather than being utilised for investment in infrastructure, the provision of vital public services, and social protection. Further, the global financial architecture has been skewed against African countries, positioning them as rule takers rather than rule makers.

It is against this backdrop that the Common African Position (CAP) on Debt was adopted by the African Union in February 2026. While its historical predecessor was adopted by the Organisation of African Unity in 1987, momentum for the updated framework emerged from the inaugural African Union Conference on Debt held in Lomé, Togo, in May 2025. The CAP provides a unified continental framework for engagement on debt restructuring, sustainable financing and reform of the global financial architecture.

The sixth African Conference on Debt and Development (AfCoDD) brought together civil society activists, government officials, members of parliament and scholars to focus on the CAP. I was delighted to represent International Lawyers Project (ILP) by participating in a panel themed Building the Foundation: Open Debt Governance as a Precondition for Sustainable Financing, in collaboration with Social Watch Benin, the Secretary General of the African Organization of Public Accounts, Bajeti Hub, the International Budget Partnership (IBP) and the Westminster Foundation for Democracy.

The underpinnings of law in debt governance

The session focused on Pillar Two of the CAP, which addresses sustainable financing and institutional resilience. It emphasises the use of innovative financing instruments, stronger African financial institutions, domestic revenue mobilisation, debt management and governance, and macroeconomic and regional integration. The central message of the session was that none of these priorities can be achieved without effective debt governance.

The panellists discussed the gap between the disclosure requirements stipulated in the legislative framework and what ultimately gets publicly disclosed, the effectiveness of parliamentary scrutiny and whether accountability mechanisms work, and the role of civil society and non-State actors play in ensuring transparency and accountability.  

The theme of the discussions aligns closely with the work of ILP’s Sustainable Finance programme, which focuses on securing debt justice and ending illegitimate debt burdens. For instance, we have analysed the legal and regulatory framework for incurring debt and managing debt for a cross-section of countries in Africa, yielding insights that echoed the panellists’ findings.

Drawing on evidence from the IBP’s synthesis across countries based on the 2025 Open Budget Survey’s (OBS) Debt Module, my presentation discussed the importance of having a robust definition of public debt, as recommended by the World Bank and IMF. This is critical because, although States generally include multilateral and bilateral loans as well as long and short-term securities within their definition, more opaque types of indebtedness, also known as “hidden debt”, are often left out. As a result, several forms of lending instruments often sit off balance sheet and are not reported. These include contingent liabilities that crystalise when triggering events happen, sovereign guarantees where governments commit to covering debt obligations of entities in the event of default, unreported collateralised debt which are sovereign loans backed by state assets or revenues, and borrowings from state-owned enterprises.

Severe fiscal risks that undermine a nation’s economic stability and fiscal governance can arise where these liabilities are not compiled and disclosed due to the lack of legal backing necessary for collecting debt statistics. For example, parliamentary oversight is rendered superficial due to the lack of a complete picture of sovereign liabilities. This can also lead to illusory compliance with statutory or constitutional debt limits that can trigger sudden, painful austerity and fiscal adjustments - as was the case in the Mozambique “tuna bonds” scandal. In addition, debt sustainability analysis, which evaluate a country’s ability to service its debt obligations and depend heavily on accurate debt stock data, can present an overly optimistic assessment, leaving a country unable to properly gauge its borrowing needs and ultimately resulting in unsustainable debt. Finally, debt restructuring processes become far more difficult when countries cannot accurately identify their borrowing requirements, and this can stall sovereign debt workouts.

Conclusion

For Pillar Two of the CAP to achieve meaningful outcomes, the legal definition of reportable debt remains the bedrock upon which its success rests. It is thus essential that states adopt a broad definition of liabilities that should be captured in national debt statistics. Without this, all other debt governance mechanisms would fail. At ILP, this is central to our strategy on sustainable finance, which targets opaque debt. By addressing legal vulnerabilities, we can reinforce public financial management frameworks and deliver tangible benefits to citizens.

International Lawyers Project (ILP) provides pro bono legal support to more than 100 civil society organisations, communities and individuals each year. Through our Sustainable Finance programme, ILP works with our partners to identify and promote debt justice including exploring themes relating to the restructuring of the global financial architecture, debt governance and management.

If you need assistance or advice in this area, please contact us at contact@internationallawyersproject.org to discuss how we can help.