By Staff Reporter
Members of the G20 Africa Expert Panel have discussed how to address flaws in the global financial architecture which oblige African countries to pay loan interest rates roughly 500% higher when borrowing from capital markets than from multilateral development banks.
Leading economists and government ministers from across Africa met for a consultative meeting on the sidelines of the African Development Bank’s 2025 Annual Meetings. Chaired by Trevor Manuel, Chairperson of the Board of South African banking group Old Mutual, the Africa Expert Panel offers strategic advice on advancing Africa’s development agenda through the G20.
The panel counts among its 25 members African Development Bank Vice president and Chief Economist Kevin Urama, MIT Professor Esther Duflo, former World Bank Chief Economist François Bourguignon, and UN Economic Commission for Africa Chief Economist Hanan Morsy.
During the session, participants identified four key priorities: addressing the climate crisis justly and urgently, advancing debt sustainability for low-income countries, mobilizing finance for a just energy transition, and leveraging Africa’s critical minerals for inclusive growth and development.
Welcoming participants during the opening on behalf of the chair Travor Manuel, Urama spoke on the systemic inequities facing African nations. He noted that with debt service costs potentially reaching $89 billion this year, critical resources are being diverted away from investments in education, health, and productive sectors.
“African countries pay about 500 percent more in loan interests when they borrow from the global capital markets compared to when they borrow from Multilateral Development Banks such as the African Development Bank Group or the World Bank. Debt service costs in Africa could reach $89 billion in 2025, diverting resources away from investments in education, health and other productive sectors,” he said.
Dr. Patrick Njoroge, former Governor of the Central Bank of Kenya and a member of the panel said, “Africa is no longer arriving late to the temple of global affairs, we’re here now, and it’s time our voice reshapes the agenda. This is not an African problem; it’s a global system failure….”
He described Africa’s current situation as a fundamental choice between servicing loans and investing in human development. “The worst debt crisis in a generation is not measured by debt-to-GDP, but by the crushing trade-off: interest payments over education, over health, over climate resilience,” Njoroge said.
Despite being the region with the least default rate for long-term infrastructure projects globally, Africa loses approximately $74.5 billion annually due to sovereign risk mispricing. With projections showing that one in four people on earth will be African by mid-century, the panel emphasized the continent’s critical role in shaping the trajectory of global development, going beyond charitable frameworks to incorporate approaches that recognize global interdependence.
South Africa is the first African nation to hold the G20 presidency The theme of its G20 presidency, Solidarity, Equality, and Sustainability, which reflects the country’s intention to promote a people-centered, development-oriented, and inclusive future.
The event live recording can be accessed here