The ONE Campaign has called on Group of Twenty (G20) leaders meeting in South Africa this week to address what it terms a global financial system that penalizes African borrowing based on perception rather than performance.
The advocacy organization issued the challenge as world leaders gathered in Johannesburg for the G20 summit, arguing that Africa faces the highest cost of capital globally not due to weak economic fundamentals but because of outdated risk assumptions and structural bias in credit assessments. The organization contends this imbalance costs African nations tens of billions annually and constrains development spending during a period of increased global economic volatility.
Financial data highlights the severity of borrowing disparities. Official development assistance (ODA) fell 7.1 percent in 2024, marking the first annual decline after five consecutive years of growth. As concessional lending contracted, many African governments turned to commercial capital markets for financing between 2016 and 2021, paying an additional 56 billion dollars in interest compared to what concessional terms would have required, according to the ONE Campaign. That differential exceeds the continent’s total foreign direct investment recorded in 2023.
Central to the organization’s argument is the African risk premium. Despite decades of stable investment returns, including infrastructure project performance that the campaign says has outperformed major equity indices, African sovereigns continue paying substantially higher borrowing rates than developed economies with comparable or weaker debt metrics. These rates reflect not only economic factors but subjective credit rating methodologies and persistent global narratives about African risk.
Serah Makka, Africa Executive Director at the ONE Campaign, framed the issue as a direct challenge to development priorities. She noted that when countries face inflated interest rates driven by perception rather than evidence, governments must choose between debt service and funding for teachers, healthcare workers and engineers. Nearly three out of five Africans now live in countries where interest payments exceed spending on health or education. Globally, 3.4 billion people face similar fiscal distortions, Makka said, describing the pattern as systemic failure.
The timing carries particular weight. South Africa holds the G20 presidency in 2025, making this the first time the global forum convenes on African soil under African leadership. The South African government has proposed establishing a Cost of Capital Commission to conduct a comprehensive expert review of factors driving borrowing costs for developing economies. That commission would examine credit rating methodologies, prudential regulations and data requirements that shape investor perceptions and capital flows.
African governments pay up to 500 percent more for capital market loans compared to borrowing from multilateral development banks, according to research cited at recent G20 business forums. External debt service for the continent reached 89 billion dollars in 2024. The ONE Campaign argues these elevated costs are not justified by default history, pointing to data showing African sovereign default rates remain lower than those in other emerging market regions.
The organization outlined specific reforms needed for what it calls an economic reset. These include overhauling risk assessment frameworks for sovereign borrowers, accelerating transparency in economic data collection and publication, expanding use of innovative finance instruments that reduce perceived risk, ensuring meaningful African participation in global financial rulemaking and guaranteeing concessional finance reaches countries with the greatest need.
The G20 Finance Ministers and Central Bank Governors endorsed an Africa Engagement Framework in October 2025, explicitly aligning G20 priorities with the African Continental Free Trade Area (AfCFTA) and the African Union’s Agenda 2063. President Cyril Ramaphosa also commissioned an Extraordinary Committee on Global Inequality, chaired by Nobel Laureate Joseph Stiglitz, which delivered its report in early November.
The summit discussions extend beyond sovereign debt to include climate finance structures, multilateral development bank reform and taxation of ultra wealthy individuals. For the ONE Campaign, however, the central question remains whether this gathering produces binding commitments or simply reaffirms existing policy language without implementation mechanisms.
The organization emphasized that lowering African borrowing costs serves global economic interests by expanding market opportunities, stabilizing regional economies and enabling productive investment in infrastructure, education and healthcare systems. This perspective contrasts with framing cost of capital reform as development assistance, instead presenting it as economically rational adjustment to evidence based risk assessment.
Whether G20 leaders translate these discussions into concrete policy changes remains uncertain. The summit outcome will be measured not by declarations but by subsequent actions from finance ministries, central banks, credit rating agencies and multilateral institutions that shape capital flows to African economies. For advocates, this moment represents either a turning point in global financial architecture or another missed opportunity to address longstanding structural imbalances.
