Debt Restructuring in Africa: A Case Study of Ghana, Kenya, Nigeria, Zambia, and Mozambique

This study discusses the problems and impacts of restructuring debt in Africa with a focus on Ghana, Zambia, Kenya, Nigeria, and Mozambique. The researcher analyzed the historical context, current challenges, and prospects of debt restructuring initiatives in these nations. Through its comparative orientation, it provided a nuanced understanding of the debt restructuring landscape in Africa. To determine the historical background, restructuring strategy, the role of international financial institutions (IFI) and the socioeconomic impacts of debt, the paper will use the theories of dependency, institutional economics and sovereign debt based on document analysis and a comparative case study approach. The restructuring of sovereign debts in Ghana and Zambia has been done using the G20 Common Framework (CF). In contrast, Kenya, Nigeria and Mozambique have utilized bilateral, multilateral and commercial models. The findings show that the dominance of the private commercial lenders as the largest creditors in Africa since 2010 has resulted in more difficult debt restructuring due to the inability to coordinate the efforts, stigma effect, and high costs to bondholders. The results also indicate that the debt situation in the five countries is marred by failures of existing debt resolution measures, culminating in the fact that reforms need to accelerate the drafting of effective debt management models among African nations. To these ends, they offer meaningful information to policymakers, economists, and scholars who are concerned with sustainable economic growth and financial stability in Africa.