Reform of International Financial Institutions (Reflections from the 2026 Annual Meetings of the IMF and WBG)
The question is whether the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) 2026 reflected the reforms that AFRODAD and the global civil society is calling for. In our view, they did not. The discussions showed more continuity and refinement of the existing system than the structural changes we believe are needed. The global financial architecture remains largely unchanged. The discussions and communiqués from the Annual Meetings did not signal a substantial shift.
Many African countries are paying more to service their debt, even as overall debt levels fall. This is driven in part by high-risk premiums and challenges of the current debt frameworks, including restructuring processes and IMF programmes. Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF) said that average debt service costs in low-income countries rose from 6% to 14% of government revenue over the past decade, despite a decline in overall debt. By the end of 2025, in Sub-Saharan Africa, external public debt service was about 18.2% of export earnings, and 28 of 48 countries at high risk of debt distress or already in debt distress. This growing gap between debt levels and the cost of servicing that debt is a central concern for our advocacy.
The International Monetary and Financial Committee repeated familiar language on the G20 Common Framework (The International Monetary and Financial Committee (IMFC) is a 25-member advisory body that guides the International Monetary Fund (IMF) and shapes the global monetary and financial system). The revised joint IMF-World Bank Debt Sustainability Framework for Low-Income Countries, the first overhaul since 2017, was published shortly before the meetings in Bangkok, but it does little in the reform of the global financial architecture. Instead of reforms to the global financial architecture, The World Bank (WB) and the IMF are pushing for fewer but deeper reforms and new medium to short-term structural reforms in African countries. These reforms are fiscal consolidation, another word for it is austerity. The IMF and World Bank are therefore preserving the system that has contributed to hardship and rising living costs, including through austerity measures imposed as conditions of IMF programmes. For AFRODAD, the current system is not fit for purpose.
During the meetings, there were recommendations for better stress tests for African countries, the treatment of domestic debt, and the inclusion of climate and development needs in debt sustainability analyses. However, these recommendations do not fundamentally reform the system in the way African countries are calling for. They keep the IMF, the WB and other international financial institutions at the centre of the global financial architecture. As we have continued to highlight, the policies associated with this system contribute to tighter fiscal space and higher borrowing costs for African countries due to the adverse credit ratings they receive. Overall, the meetings in Bangkok did not show the IMF and World Bank as prepared to move away from this approach. On the ground, changes to debt frameworks, such as considering domestic debt, climate and development needs, and stress tests, may adjust the existing system, but they do not reform it. In our view, they preserve it. That is not the change we are seeking.
Recommendations
The changes we are seeking must address the short, medium and long term. In the short to medium term, the IMF and World Bank should publish the costs and risks reflected in their debt sustainability analyses. These analyses should clearly explain the fiscal adjustment being assumed, the thresholds and warning signs used, and what should happen when a country shows signs of approaching debt distress. Too often, debt restructuring under the G20 Common Framework has been slow or has come late in the process. Our short- to medium-term recommendation is that restructuring should begin early, when debt becomes unsustainable, rather than leaving countries to make adjustments over the long term. Prolonged debt distress undermines social spending and the investment needed to support development in African countries.
Social Protection
Despite tightening fiscal space and resistance to reform, we strongly recommend protecting social protection in African countries. Much of the money countries raise goes to debt service instead of investment in social sectors. We therefore call for social spending floors that are binding and increase over time, and that are treated like other disbursement conditions imposed by the IMF and World Bank. These minimum spending commitments would help protect health and education budgets from cuts or limits.
UN Framework Convention on Sovereign Debt
As part of the Sevilla Outcome Document (Compromiso de Sevilla) and the Common African Position on Debt, we are calling for a UN Framework Convention on Sovereign Debt. It would provide a forum where African countries could participate on equal terms in decisions about access to finance and its cost, the rules for lending and restructuring, and how African credit ratings are determined. This could help ensure that the overperceived risk about African countries and the high premiums they pay for the risks reflect their economic realities and inclusive policies, rather than being dictated by creditor interests.
The Borrower’s Platform
In the long term, we want a global financial system that is more inclusive and responsive to the economic realities of African countries, and that is not dominated by creditor interests. There was no major shift at the IMF and World Bank meetings toward restructuring the system. There were, however, some gradual gains, including the launch of the Borrowers’ Platform. It gives borrowers an opportunity to coordinate and engage with creditors. Creditors have been more coordinated than borrowers, and that coordination has helped them shape the rules of the system. We hope the platform will help borrowers coordinate more effectively and influence those rules.
Transcribed, edited and adapted by: Howard Mwangi, Campaigns and Communication Officer
Source: Janet Zhou, Executive Director | Dr. Yungong Theophilus, Policy Advocacy & Research Manager