By Dr Kato Kimbugwe, Patience Nduwayezu, Leonidas Kazana Manayubahwe, Jean Marc Mukundabantu – Vanguard Economics
More than 40% of African countries now spend more on debt service than on health. Between 2021 and 2023, the continent spent roughly US $70 per person on interest payments, compared with US $63 on education and US $44 on public health. Public debt across Africa reached an estimated US $2 trillion by 2024, and the number of countries with debt above 60% of GDP more than doubled in a decade, from 10 in 2015 to 23 in 2024. Behind these numbers sits a question that conventional debt analysis rarely asks: not how much countries borrow, but how debt is governed.
That question is at the heart of the Economic Governance Report III: Assessment of Governance of Public Debt in Africa, published by the United Nations Economic Commission for Africa (UNECA). Vanguard Economics was contracted by UNECA to undertake the data collection, develop the assessment framework and deliver the analysis underpinning the report. Dr Kato Kimbugwe served as technical lead, designing the methodology and supervising national case studies carried out by a team of six national consultants in Cameroon, the Comoros, Egypt, Ghana, Rwanda and Zambia.
Reframing debt sustainability
Existing global frameworks focus narrowly on repayment capacity, short-term market confidence and creditor coordination. The report argues this misses the point. It contrasts the conventional market-enhancing paradigm, which assumes fiscal discipline and rule-based management are sufficient, with a Growth-Enhancing Governance (GEG) approach that evaluates debt by its contribution to structural transformation, productive capacity and long-term resilience. Debt, in this view, is not merely a fiscal liability; it is a strategic instrument for financing economic transformation, and it succeeds or fails on the strength of the institutions that manage it.
A new way to measure debt governance
To make this measurable, the report introduces ECA’s Sustainable Debt Governance Cycle and a Debt Sustainability Index (DSI) that scores institutional performance across five stages of the debt lifecycle. Strategic alignment, assessment of financing needs, identification of financing sources, evaluation of terms and conditions, and oversight and impact monitoring. The quantitative scores were paired with in-depth qualitative analysis of institutional mandates, legal frameworks, capacity and political economy dynamics in each country.
What we found
The DSI reveals wide variation in institutional maturity. Egypt leads with a score of 3.6 out of five, followed by Ghana (2.6), Rwanda (2.5), Cameroon (2.4), Zambia (2.4) and the Comoros (1.3). A consistent pattern emerges across all six countries: governance is strongest upstream, in strategic planning and needs assessment, and weakest in execution, particularly in negotiating financing terms and monitoring implementation. Countries have learnt to design debt strategies aligned with national development plans, but the governance cycle remains incomplete: robust at the level of design, fragile at the level of execution.
The qualitative analysis shows why. Six systemic weaknesses recur across the case studies: fragmented institutional mandates and weak coordination; incomplete and weakly enforced legal frameworks that permit off-budget borrowing; limited technical and analytical capacity within debt management offices; political interference and election-cycle borrowing; weak oversight of state-owned enterprises and contingent liabilities; and marginal parliamentary and civil society scrutiny.
Critically, institutional quality, not macroeconomic stability alone, determines debt outcomes. Egypt and Rwanda, both classified as moderate risk under the IMF-World Bank Debt Sustainability Analysis, record the strongest institutional coherence. Countries with fragmented systems face recurrent crises despite comparable macroeconomic frameworks. The report also identifies a financing paradox: governments are urged to professionalise debt offices and strengthen oversight precisely when fiscal space to fund those reforms is most constrained. Without explicit mechanisms to finance institutional reform, governance strengthening risks becoming an unfunded mandate.
Seven policy directions
The report distils its findings into seven recommendations:
- Establish national debt governance councils that bring together finance ministries, central banks, debt offices, planning bodies and audit institutions to coordinate borrowing decisions.
- Enact or update comprehensive debt governance framework laws covering all levels of government and state-owned enterprises, with borrowing ceilings, mandatory disclosure and enforceable sanctions.
- Build sustainable in-house analytical capacity, including professional debt analytics cadres and specialised legal and financial expertise for complex negotiations.
- Introduce fiscal neutrality clauses that restrict new borrowing during electoral periods and depoliticise oversight of state-owned enterprises.
- Create integrated debt dashboards consolidating central, subnational and SOE debt data, with real-time risk alerts accessible to parliaments and the public.
- Institutionalise Parliamentary Debt Review Panels, supported by technical advisory units and annual public hearings.
- Align national debt strategies with global governance standards, including the Compromiso de Sevilla (2025) and the African Union’s Common African Position on Debt.
Half the battle
The report is equally clear that domestic reform alone is not enough. Even the best-governed borrower operates within a global financial architecture marked by asymmetric bargaining power, pro-cyclical capital flows and slow, fragmented restructuring processes. It therefore calls for automatic debt service standstills when countries apply for restructuring, an African Borrowers’ Club to strengthen collective bargaining power, rechannelling of Special Drawing Rights through the African Development Bank as hybrid capital, and the operationalisation of an African Credit Rating Agency to address systemic bias in global risk assessments. With over 20 African countries in, or at high risk of, debt distress, the message of EGR III is urgent and practical: Africa’s debt future hinges on governance, not just numbers. The priority is not merely to reduce debt ratios, but to build resilient institutions that ensure every borrowed dollar contributes to the continent’s transformation.
For Vanguard Economics, it was a privilege to lead this work for UNECA alongside an outstanding team of national consultants: Remon Fohopa (Cameroon), Thabiti Yssoufa (the Comoros), Mohamed Elashry (Egypt), Gloria Kafui Bob-Milliar (Ghana), Amina Umulisa Rwakunda (Rwanda) and Pamela Chibonga (Zambia). Over the coming weeks we will publish short country spotlights drawing on each national case study. The full report is available from UNECA. https://www.uneca.org/economic-governance-report-iii
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