As Africa strives to achieve the 2030 Sustainable Development Goals, it faces a pressing dilemma: reconciling its significant debt burden with the imperative of accelerating development. With an external debt load of approximately $750 billion and debt servicing absorbing a substantial portion of government revenues, the continent’s ability to achieve its ambitious goals is severely tested, as it must navigate its debt obligations while making progress towards the SDGs without being held back by the weight of debt.
The debt burden is particularly onerous for many African nations, with several countries struggling under the weight of substantial external debt burdens. The majority of Sub-Saharan African countries dedicate a significant 15-20% of their government revenues towards debt servicing, leaving limited resources for vital development projects.
According to the United Nations, debt servicing is absorbing 41.5% of budget revenues across 144 developing countries; this means a drastic cut in welfare, education, or health expenditure to pay debts. This financial strain has far-reaching consequences, curtailing investment in essential public services such as healthcare, education, and infrastructure, fundamental areas that are crucial for achieving the SDGs.
The UN estimates that Africa requires approximately $1.2 trillion annually to achieve the SDGs. However, the significant allocation of funds towards debt servicing leaves a substantial shortfall in resources for critical development initiatives. This has led to difficult decisions, with governments forced to make tough choices between vital public expenditures, often resulting in cuts to education and healthcare budgets. This, in turn, hinders progress towards targets related to quality education and good health, exacerbating the challenges in achieving the SDGs.
To mitigate the debt burden, international efforts have been launched, including the G20’s Debt Service Suspension Initiative and the Common Framework for Debt Treatments. While these measures provide temporary relief, they do not fully address the underlying debt crisis. The International Monetary Fund’s allocation of $650 billion in Special Drawing Rights in 2021, Africa received only $34 billion—been barely 5 percent. At the same time, European Union countries like mine received $160 billion with less than half a billion people.
Despite the hurdles, African countries are making progress towards the SDGs by adopting diverse strategies. They are prioritising domestic resource mobilisation through improved tax collection and anti-corruption efforts, leveraging the private sector’s expertise in areas like renewable energy and technology to drive development.
According to the UN, achieving the Sustainable Development Goals (SDGs) holds immense potential, with estimated market opportunities of $12 trillion and 380 million jobs by 2030. For Africa, the Africa Continental Free Trade Area (AfCFTA) presents a unique chance to accelerate SDG implementation and align with the continent’s Agenda 2063.
According to the 2020 scores, the average performance across all African member states stands at 53.82, a slight improvement from the previous year. However, this still means that the continent has only made halfway progress towards achieving the SDG goals and targets by 2030, highlighting the need for sustained efforts and accelerated action to bridge the remaining gap.
Regional cooperation is also gaining momentum, with initiatives like the African Union’s Agenda 2063 facilitating economic stability and collaborative projects that promote sustainable growth and development across the continent.
To achieve lasting progress, there is a need to scale up financial and technological support for African countries to secure affordable and clean energy access for all by 2030 and to achieve net-zero emissions by 2050. That requires doubling energy investments this decade by mobilising domestic resources and foreign investments to bridge the gap to guarantee that electricity gets to all African households.
To achieve sustainable growth, a comprehensive strategy is required, encompassing robust debt management, economic diversification, and international cooperation. By developing sustainable debt restructuring plans, Africa can redirect resources towards productive investments, reduce dependence on commodity markets, and create a more stable fiscal foundation. Concurrently, fostering international cooperation and promoting equitable trade practices can help reconcile debt servicing with development needs, ultimately fostering a more resilient and prosperous future.
