April 28, 2023 — An estimated 61 countries are currently in debt distress or at risk of it, which is almost one third of the membership of the IMF [32% of 190]. The G20’s Common Framework for Debt Treatment is supposed to facilitate debt restructuring for low-income countries. But it has made only slow progress.
Many of these countries are in Africa. Chad restructured its debt in 2021, the first to do so under the Common Framework. Zambia defaulted on its foreign debt in 2020, but has so far been unsuccessful in getting its creditors to agree on how to restructure its debt. Reluctance of China to participate with other creditors in the traditional Paris Club process is a particular problem in the Zambian case. Ghana, which defaulted on its external debt in December 2022, has apparently been better able to move forward with restructuring. Rescheduling of the terms of Ethiopia’s debt was delayed by civil war, but may move forward now. Angola received 3-year debt relief in September 2020, but remains in trouble.