Why debt cancellation is Africa's last hope for climate justice

Africa is trapped in a vicious cycle. It faces escalating climate disasters but spends more on debt repayment than on protecting its people.

In 2023, African nations paid over $70 billion in debt servicing—money that could have built climate-resilient infrastructure, expanded renewable energy, and funded adaptation projects. Instead, countries borrowed even more to survive crises they did not create.

At COP29, developed countries pledged $300 billion annually by 2035 for global climate finance.

But African leaders demanded $1.3 trillion—the minimum required to implement their climate plans.

At a packed side event titled “Securing Africa’s Agency in the 2025 Climate Finance Agenda,” experts called for debt cancellation.

Speakers insisted that without freeing up fiscal space, no amount of new pledges—from $100 billion to $1.3 trillion—will matter.

The gap between promise and need reveals a system rigged against one of the world’s most vulnerable continents.

The math reveals injustice: Africa requires $2.8 trillion by 2030 to meet its climate goals, with $1.3 trillion needed annually for adaptation, renewable energy, and loss compensation.
The $300 billion pledged at COP29 represents a fraction of what is required—with no clarity on how much will come as grants versus loans.

Dr Olufunso Somorin of the African Development Bank described it as a development and climate trap:

“Debt servicing in Africa has risen from $17 billion in 2010 to $74 billion in 2024,” he said.
“Commercial rates cannot support development, let alone climate resilience. Without reform and relief, this is a lost decade.”

Mohamed Adow, Director of Power Shift Africa, echoed these sentiments at COP29:

“The $300 billion deal is an insult. It condemns us to more debt or more disasters.”

This funding shortfall compounds Africa's existing debt crisis. The continent’s $70 billion in annual debt servicing exceeds the climate finance it receives—creating a paradox where nations must prioritize creditors over survival.

Mozambique exemplifies this cycle of ruin. After Cyclones Idai and Freddy destroyed infrastructure, the country took out loans to rebuild. Today, over 90% of its climate finance is debt-driven, diverting funds from healthcare and education.

Ghana’s fiscal trap further illustrates the problem. With its debt-to-GDP ratio hitting 70% in 2024, debt restructuring talks stalled public investment in flood defenses and solar energy—leaving communities exposed.

Gloria Majiga of the Tax Justice Network said:

“Debt servicing steals from our future. We pay banks while storms erase our villages.”

Private creditors—who hold 43% of Africa’s debt—resist restructuring, prioritizing profits over people.

The imbalance is evident: interest rates for African nations average 11.6 per cent, compared to 0.8 per cent for Germany. This drains $60 billion annually from the continent.

The moral case for debt cancellation grows stronger when considering climate justice. Rich countries owe Africa $36 trillion in climate reparations for historical emissions, according to ActionAid calculations.
This dwarfs Africa’s entire external debt of $1.8 trillion.

Julius Mbatia, a climate finance expert at ACT Alliance Global, stated:

“It is a travesty that African nations are crushed under debt while rich countries evade their responsibility.”

COP29’s $300 billion pledge ignored Africa’s appeals for grant-based finance and blurred the lines between loans and grants—risking deeper indebtedness.

The deal also failed to reform the global financial architecture, leaving private creditors unchecked and multilateral banks still prioritizing loan-based solutions.

“Loans for climate resilience are a paradox. We need grants, not more debt,” Mbatia said.

Solutions Require Structural Change

Debt cancellation for climate-vulnerable nations must be linked to investments in renewable energy and adaptation.

Grant-based climate finance should comprise at least 70% of funding—directed to community-led projects, not foreign consultants.

Global financial reform should include creating a UN Framework Convention on Debt to replace IMF-dominated systems and establishing a Pan-African Credit Rating Agency to counter biased risk assessments.

There are precedents. Somalia secured a 99 per cent debt write-off from Paris Club creditors in 2024.

The U.S. cancelled over $1 billion in bilateral loans—reducing Somalia’s debt from 64 per cent of GDP to less than 6 per cent.

This relief created fiscal space to invest in basic services and recovery. Advocates argue the same approach should be applied continent-wide.

International institutions are not blind to the problem. The United Nations estimates that Africa will be $2.5 trillion short of climate finance by 2030.

UNECA’s Executive Secretary, Claver Gatete, warned that unfair credit ratings alone cost the continent $74.5 billion. He called it a structural penalty that denies Africa affordable finance.

The African Development Bank is pushing for fairer global rules. Former president Akinwumi Adesina argued that the G20 Common Framework for debt restructuring is too slow and too narrow.

“We need a mechanism that frees resources for solar, wind, and resilient infrastructure—not one that punishes countries with endless negotiations,” he said.

Civil society voices demand more transparency. Majiga argued that citizens must know what governments borrow—and on what terms.

“Too often, debts are contracted in secret, leaving the public to pay. If relief comes, it must be tied to accountability and to investments in people and the planet,” she said.

Adow concluded that Africa’s future hinges on debt justice. By 2030, climate impacts could cost the continent $50 billion annually.

“Canceling debt is not charity—it is reparations. As COP30 approaches, rich nations must choose: perpetuate a colonial system or uphold climate justice,” he noted.
“The numbers don’t lie, and the crisis won’t wait.”