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Former Ghanaian President Nana Addo Dankwa Akufo-Addo has called for a fair and needs-based debt relief mechanism to support countries in economic distress.
Speaking at the launch of the African Leaders Debt Relief Initiative (ALDRI) in Cape Town, he emphasised that debt-stricken nations, including Ghana, must receive the necessary support to invest in sustainable solutions for their people.
“Ghana’s situation underscores the need for debt relief that is both fair and needs-based. Countries in debt distress must receive the necessary support to invest in sustainable solutions for their people,” Akufo-Addo stated.
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His remarks came as eight former African heads of state and government signed the Cape Town Declaration, calling for urgent debt relief and lower borrowing costs for developing nations.
The initiative was launched on the sidelines of the G20 Finance Ministers’ meeting, where debt sustainability has been a key agenda under South Africa’s G20 presidency.
Ghana, like many other African nations, has been struggling with crippling debt that has drained national resources, limiting investments in healthcare, education, and infrastructure. With Africa facing some of the highest borrowing costs in the world, leaders are demanding reforms to the global financial system to ensure fairer lending practices and more sustainable repayment terms.
In 2023 alone, low- and middle-income countries spent $1.4 trillion servicing foreign debt, with $406 billion going to interest payments. Many African economies are forced to borrow at significantly higher rates than wealthier nations, leaving them in a cycle of debt distress.
“Countries on the frontlines of the development crisis are the same ones grappling with record levels of debt,” said Joyce Banda, former president of Malawi. “By 2030, these nations will need to invest up to $6.4 trillion annually to achieve sustainable development. However, this goal remains unaffordable given their overwhelming debt obligations.”
The African Leaders Debt Relief Initiative (ALDRI), spearheaded by prominent former African leaders, is advocating for:
- Comprehensive debt restructuring to ease the financial burdens of highly indebted nations.
- Lower borrowing costs to enable sustainable economic growth.
- Stronger international partnerships to create a more equitable global financial system.
With the G20 Summit in 2025 approaching, the Cape Town Declaration seeks to draw global attention to the issue, urging world leaders to prioritise debt relief as a critical step towards economic resilience and stability in Africa.
Akufo-Addo and the other signatories stressed that debt relief is not just an African issue but a global necessity. Without urgent action, they warn, many developing nations will continue to face financial instability, limiting their ability to achieve long-term economic growth.
“The debt crisis has been worsened by rising interest rates and a stronger dollar, making it increasingly difficult for African countries to manage dollar-denominated debt,” said Jakaya Mrisho Kikwete, former president of Tanzania. “A global solution to this crisis is not only vital for our economies but will also benefit everyone around the world.”
As international discussions on debt relief and economic reform continue, the voices of African leaders, led by Akufo-Addo and his counterparts, are becoming impossible to ignore. The call for fair, needs-based debt relief has been made—now, the world must respond.
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