Debt Restructuring: The Global Sovereign Debt Round Table and the G20 Common Framework (Reflections from the 2026 Annual Meetings of the IMF and WBG)
7th Co-Chairs’ Progress Report of The Global Sovereign Debt Round Table
The Global Sovereign Debt Roundtable (GSDR) is an initiative co-chaired by the IMF, the World Bank and the G20 Presidency, and brings together official bilateral creditors (both traditional creditors, members of the Paris Club and new creditors), private creditors and borrowing countries, to build a common understanding among key stakeholders on debt sustainability and restructuring challenges and how to address them. The initiative has been ongoing since 2023. The GSDR released the seventh Co-Chairs’ Progress Report that during the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG). Released by the IMF Managing Director Kristalina Georgieva, World Bank Group President Ajay Banga, and Erin Browne, the U.S. Under Secretary for International Affairs.
The discussions of the GSDR at the annual meetings focused on standardising the formulas for comparability of treatment across creditor groups, including official bilateral creditors, private creditors and bondholders, and multilateral development banks. They also reviewed progress on debt restructuring under the G20 Common Framework (from the perspective of IMF, World Bank and the G20). The report indicates that most restructuring cases begun in 2021–22 are largely complete, although for some countries, some residual commercial creditor negotiations remain. Ghana and Zambia are among the cases with residual negotiations (negotiations remaining with a few commercial creditors). Ethiopia, the fourth African country to seek treatment under the G20 Common Framework, had concluded an agreement with its official creditors and is moving ahead with bilateral agreements. Ethiopia’s negotiations with bondholders had involved disagreements over comparability of treatment (AFRODAD’s past press releases on Ethiopia’s negotiations with bondholders – 24th January 2025 and 17th December 2025). The Government of Ethiopia reached a new agreement in principle with a bondholder committee in June 2026 (holding about 45% of the defaulted $1 billion Eurobond), and the Official Creditor Committee later assessed the terms as comparable. However, the bond exchange was still pending when the seventh report was published.
Senegal and the G20 Common Framework
Senegal has requested a debt treatment under the Common Framework (CF), becoming the 5th African country to do so. The request follows the discovery of previously undisclosed borrowing, estimated at more than US$11 billion by the IMF, others like S&P Global putting the figure closer to US$13 billion. Senegal approached the IMF for a loan and has reached a staff-level agreement with the IMF on a proposed US$2.2 billion programme. The agreement still requires approval by IMF management and the Executive Board. At the World Bank and IMF meetings last week, discussions about Senegal’s debt restructuring suggested that it may follow the same process as other African countries. Senegal will still need an IMF programme, which is likely to include austerity or fiscal conditions. The issue of comparability of treatment also remains unresolved, including after these meetings. Senegal may face a lengthy restructuring process because Eurobond holders account for a significant share of its debt. It could encounter challenges similar to those faced by the other countries. AFRODAD is calling on the IMF to consider suspending fiscal consolidation measures and provide a debt-service standstill while Senegal awaits approval of its programme and restructuring. This would give Senegal fiscal space to rebuild its economy, grow its revenue, and plan a sustainable way to repay its debt.
Generally, the co-chairs of the Global Sovereign Debt Roundtable feel that there has been progress on the restructuring. From AFRODAD’s perspective (a civil society perspective), progress in coordinating restructuring processes is welcome, but the Global Sovereign Debt Roundtable remains a voluntary forum (relies on voluntary consensus). The agreements reached there are nonbinding, which limits its ability to ensure that creditors take part in negotiations and can’t prevent creditor holdouts like we have seen in the case of Ethiopia. Non-Paris Club bilateral lenders can also continue to exploit procedural loopholes within the G20 Common Framework. For debtor nations, particularly African countries, this means being trapped in lengthy restructuring processes. This has been the experience of at least four African countries (Zambia, Ghana, Ethiopia and Chad). During negotiations, countries continue to service their debts, and interest continues to accumulate. The report focuses on Zambia and Ghana mainly on the administrative aspects of restructuring and present progress in coordination as a success. However, they overlook the years of economic paralysis that countries have endured while continuing to service their debt and implement the austerity measures imposed. In Zambia and Ghana, for example, social cuts were made, including haircuts (reductions) on domestic debt that severely affected pension funds.
The IMF-World Bank Group three pillar approach (3PA)
The Global Sovereign Debt Roundtable also reviewed the progress in the implementation of the IMF-World Bank Group three pillar approach (3PA). Under this approach, countries facing liquidity problems may be given fiscal space if they maintain certain macroeconomic reforms, which often amount to fiscal consolidation (austerity). However, African countries are facing solvency problems, not liquidity problems. This three-pillar approach therefore does not necessarily address the debt solvency problems African countries face. It risks treating insolvency as a manageable liquidity problem rather than resolving the underlying debt burden. This could contribute to domestic debt traps across the continent. As countries increase domestic borrowing, they may crowd out the private sector as well as become more dependent on domestic markets. We have seen this in countries such as Kenya and Senegal, through AFRODAD’s study titled ‘Domestic Debt Conundrum in Africa’. Given the solvency problems African countries are experiencing, what is needed is unconditional debt cancellation where possible, or debt standing mechanisms during debt negotiations, as we have called for, including within the G20 Common Framework.
Transcribed, edited and adapted by: Howard Mwangi, Campaigns and Communication Officer
Source: Diana Mochoge, Policy, Advocacy & Research Officer, Domestic Resource Mobilisation