Details
Key Signal
Ghana, Zambia and Ethiopia are expected to conclude their external debt restructuring under the G20 Common Framework in 2026; Senegal and Mozambique are likely to need to begin similar restructuring before end-2026.
What Is Changing
Zambia restructured $6.3bn (including $4.1bn specifically owed to China) after defaulting in December 2020; Ghana reached a 37% haircut agreement on $13bn with bondholders in 2024 alongside a domestic debt exchange; Ethiopia defaulted in December 2023 and remains held up in a legal dispute with bondholders as of mid-2026, having had an $800m settlement offer rejected.
Why It Matters
China is Africa's largest bilateral creditor, having lent more than $800 billion across the continent over two decades — its participation (or reluctance to accept comparable losses to private creditors) has repeatedly been the limiting factor in how fast these restructurings conclude.
Outlook
More than half of sub-Saharan African countries currently have an active IMF programme, and more are expected to apply as a result of broader global economic shocks; the Common Framework's voluntary nature (private creditors, ~43% of Africa's external debt, are not obligated to participate) continues to produce protracted, incomplete processes.
Key Risks
Fiscal misreporting (flagged in Senegal) highlights transparency gaps that could complicate future restructurings; debt-distressed sovereigns hold reduced capacity for new infrastructure and public investment while restructuring remains unresolved.