Africa’s debt crisis has become a direct threat to development, with governments spending more on debt servicing than on schools, hospitals, and job creation, according to Akhator Joel Odigie, General Secretary of the African Regional Organization of the International Trade Union Confederation (ITUC-Africa).
Speaking ahead of the Pan-African Rally for Debt Cancellation and Trade Justice in Accra on August 29, Odigie said the continent’s ballooning sovereign debt which hit USD 2.14 trillion in 2024 is leaving countries trapped in austerity while millions of citizens face declining public services.
“Debt in itself is not bad. When invested wisely, it can build roads, schools, hospitals, and industries. But reckless borrowing, without accountability and productive returns, is a path to perpetual dependency,” he said.
Debt Burden Overshadows Social Spending
According to the African Union’s May 2025 Lome Declaration, 22 African countries are at high risk of debt distress while Ghana, Zambia, Ethiopia, and Chad are already in default. Startlingly, seven nations spend more on interest payments than education, and 25 spend more on debt than healthcare, leaving citizens to bear the brunt of austerity, wage freezes, and cuts to essential services.
Illicit Financial Flows Deepen the Crisis
Adding to the problem, Africa loses USD 41 billion annually to illicit financial flows, tax evasion, and profit repatriation, more than it gains from aid and remittances. Odigie warned that unless governments plug these leakages, prudent borrowing alone cannot rescue economies.
Trade, Jobs, and the AfCFTA Question
Linking debt with trade justice, Odigie cautioned that borrowing should not subsidise unfair trade arrangements under the African Continental Free Trade Area (AfCFTA). He stressed that the pact must generate decent jobs, not just GDP growth, or risk driving workers into deeper inequality.
Structural Reform Needed
For ITUC-Africa, the solution lies in restructuring Africa’s debt architecture, prioritising domestic revenue mobilisation, and ensuring accountability in public expenditure. International creditors, Odigie said, must also accept responsibility in creating fairer terms.
The upcoming rally in Accra, to be joined by workers, civil society groups, and political leaders including Ghana’s Vice President, Prof. Jane Naana Opoku-Agyemang, will demand debt cancellation and a new global financial order.
“Prudent borrowing is about sovereignty,” Odigie concluded. “Africa must only take loans that build productive capacity, expand decent employment, and strengthen resilience. Otherwise, we will remain trapped in a cycle of borrowing to pay off old debts.”
