Washington DC, USA// — As leaders of the World Bank and the International Monetary Fund (IMF) gather in Washington, D.C., a new analysis from the African Center for Economic Transformation (ACET) reveals the profound human impact of finance reforms that could unlock more than $320 billion in revenue and offer lifesaving relief to governments drowning in debt.
“African governments are currently spending nearly 17% of their revenues just to service debt — often paying more to creditors than for their own citizens’ health and education. This isn’t just a fiscal challenge; it’s a human one,” Mavis Owusu-Gyamfi, president and CEO of the African Center for Economic Transformation, said.
“Imagine what those resources could achieve if redirected toward strengthening clinics, training teachers or ensuring families have access to clean water. 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 and a community’s path out of poverty.
Our analysis shows that with bold debt reform, we can unlock the resources needed to invest in people and drive real transformation. As South Africa prepares to host the G20 heads of state meeting next month, Africa has a crucial opportunity to call for a fairer global debt system that truly serves its people.”
The assessment from ACET uses simulations from the GRADE model to examine the developmental outcomes of capping debt servicing costs at 5%, 10% and 14% of government revenue.
Covering 21 African nations at varying levels of development, the analysis explores the potential impact of debt relief on access to water and sanitation, educational gains, child survival, and maternal health outcomes.
The findings are striking:
- A 5% cap on debt servicing across all 21 countries would unlock more than $320 billion in revenue for African governments.
- Across the 21 countries, a 10% cap on debt servicing could unlock enough money to provide sanitation access to nearly 10 million people while also averting roughly 23,000 deaths of children under 5 every year.
- In Egypt, limiting debt repayments to 5% of government revenue would allow the country to achieve universal access to clean water and sanitation, while eliminating maternal mortality altogether.
- In Angola, reducing the cost of debt to 14% of government revenue would allow the country to avoid the deaths of more than 700 mothers in childbirth, as well as more than 8,000 children under 5 every year.
- In Ethiopia, a 14% cap would enable some 340,000 children to attend primary school, reducing the out-of-school population by nearly 5%.
Overall, the 5% scenario delivers the greatest developmental gains, while the 10% scenario balances fiscal realism with significant outcomes. Even the 14% scenario achieves meaningful improvements, particularly in maternal survival and access to basic services.
“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,” Dr Ed Brown, senior director, research, policy and programs at ACET said. “The global financial system must work for development, not against it.”
The analysis was released as Ms Owusu-Gyamfi — alongside Joseph Stiglitz, Martín Guzmán and over 20 leading global economists — wrote an open letter to finance ministers and leaders of the World Bank, IMF and other international finance institutions calling for urgent debt relief and reforms to unlock growth for low- and middle-income countries.
“This isn’t about wiping away Africa’s debt — it’s about making sure that borrowing actually works for African countries, not against them,” Ms Owusu-Gyamfi said. “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 analysis concludes that reducing the cost of debt is one of the most powerful and efficient ways to accelerate progress toward the Sustainable Development Goals (SDGs) and ensure a prosperous and equitable future for all Africans.
