African leaders during the 38th AU Summit strengthened their demands for debt justice through economic sovereignty which required integration between debt relief and financial system transformations.
The future debt service payments projected at $88.7 billion in 2025 have leaders arguing that expensive borrowing expenses and inaccurate credit ratings block economic expansion throughout Africa.
The Kingdom of Lesotho belongs to a growing number of countries confronted with escalating debt problems.
Dr. Rets’elisitsoe Matlanyane as Lesotho’s Minister of Finance and Development Planning presented during her 2025 budget presentation that the nation’s debt amounted to M23.1 billion and external debt accounted for 83% (M19.3 billion) and domestic debt amounted to 17% (M3.8 billion).
The Government of Lesotho seeks to manage this situation through two strategies: they created a Public Debt Rule which aims to maintain debt levels in proportion to GDP and they plan to sell M600 million in treasury bonds for infrastructural investment.
To address Africa’s debt crisis, AU leaders have launched three major initiatives: a G20 Expert Panel on Debt Relief led by South Africa, which seeks to lower borrowing costs and introduce flexible restructuring options; an African Credit Rating Agency to provide fairer assessments and prevent artificially high borrowing costs; and the African Financial Stability Mechanism (AFSM), a newly approved fund under the African Development Bank (AfDB) designed to offer concessional financing and reduce reliance on expensive commercial loans.
According to Serah Makka who holds the Africa Executive Director position at ONE Campaign, African states must spend four times more for loans than developed countries and debt repayment consumes fifty-eight percent of public funds.
The debt burden prevents governments from supporting healthcare services and building infrastructure as well as developing climate resilience projects which compels them to elevate taxation to weigh heavier upon citizens’ wallets.
The government of Lesotho has started to concentrate on better debt management practices and improved financial transparency measures. The stable debt-to-GDP ratio shows progress but Dr. Matlanyane urges the country to implement precise financial strategies for lowering international debt dependence.
The demand for financial system fairness from African leaders has President of the International Monetary Fund (IMF) Kristalina Georgieva and World Bank Group President David Malpas under pressure to bring structural reforms.
African countries are building their financial ties through alternative deals as Kenya received Sh193 billion from the UAE while Ghana started executive negotiations with China and the Paris Club regarding flexible debt conditions.
Africa’s economic future demands a strong need for debt justice together with financial independence which has never been more urgent. The world’s financial institutions will either begin meaningful reform procedures or they will continue to delay actions according to present evidence.
