Debt reform could unlock $320bn and save lives across Africa, new analysis finds

As global financial leaders gather in Washington, D.C. this week for the annual World Bank and International Monetary Fund (IMF) meetings, a new analysis from the African Center for Economic Transformation (ACET) is drawing attention to the human cost — and potential human benefit — of reforming the world’s debt system.

The report, unveiled on Wednesday, reveals that capping African governments’ debt servicing costs could unlock more than $320 billion in revenue, transforming lives across the continent and offering struggling governments a path out of what ACET calls a “cycle of debt and dependence.”

Mavis Owusu-Gyamfi, ACET president and CEO, said those resources could achieve a lot if redirected toward strengthening clinics, training teachers or ensuring families have access to clean water. 

“African governments are currently spending nearly 17% of their revenues just to service debt — often paying more to creditors than they do for their citizens’ health and education,” Owusu-Gyamfi said.

“This isn’t just a fiscal challenge; it’s a human one. Every dollar used to pay debt is a dollar that could change a life — a child’s chance to learn, a mother’s access to health care, or a community’s path out of poverty.

Owusu-Gyamfi said that as South Africa prepares to host the G20 Heads of State Summit next month, the continent has a “crucial opportunity to call for a fairer global debt system that truly serves its people.”

Using simulations from the GRADE model, the ACET assessment examined the developmental outcomes of limiting debt servicing costs at 5%, 10%, and 14% of government revenue across 21 African nations.

The findings show that even modest reductions in debt payments could deliver measurable and life-changing results.

• A 5% cap on debt servicing would free up more than $320bn for African governments.

• A 10% cap could enable nearly 10 million people to gain access to sanitation and prevent around 23 000 child deaths every year.

• In Egypt, limiting debt payments to 5% would allow the country to reach universal access to clean water and sanitation and eliminate maternal mortality.

• In Angola, reducing debt costs to 14% would save the lives of more than 700 mothers and 8 000 children under five each year.

• In Ethiopia, a 14% cap could send 340 000 more children to primary school — cutting the out-of-school population by nearly 5%.

While the 5% scenario would deliver the most sweeping improvements, the 10% scenario, ACET says, “balances fiscal realism with significant human outcomes.”

Dr. Ed Brown, ACET’s senior director for research, policy, and programs, said even the higher 14% scenario would bring meaningful progress, particularly in maternal health and basic service access.

“These numbers show that debt reform isn’t just about balance sheets — it’s about empowering children to go to school, helping mothers survive childbirth, and giving communities access to clean water,” Brown said. “The global financial system must work for development, not against it.”

The release of ACET’s findings coincides with a broader push by global economists for urgent debt reform.

Owusu-Gyamfi joined Joseph Stiglitz, Martín Guzmán, and more than 20 other leading economists in an open letter to finance ministers and international financial institutions urging them to adopt new measures that make borrowing fairer and more sustainable for low- and middle-income countries.

In the open letter, the economists called for urgently reducing current debt burdens and servicing costs, including the World Bank and IMF replenishing their debt-relief funds, and ensuring that countries can access a range of debt relief options that fit their unique circumstances. 

“This isn’t about wiping away Africa’s debt,” Owusu-Gyamfi emphasized. “It’s about making sure that borrowing actually works for African countries, not against them. We need to rewrite these deals to ensure that every dollar lent helps reduce poverty and kickstart economic growth, instead of trapping countries in an endless cycle of debt and dependence.”

The ACET analysis concluded that lowering the cost of debt was among the most powerful and efficient ways to accelerate progress toward the Sustainable Development Goals (SDGs) — and to secure a prosperous, equitable future for all Africans.

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