It’s been almost three months since Ethiopian Prime Minister Abiy Ahmed issued one of the first calls for emergency debt relief for Africa. Back in March, when the prime minister posted his appeal to the G20 on Twitter, COVID-19 had not yet arrived in Africa and economies across the continent were still largely holding up.
Now, the situation looks very different.
Some countries are grappling with tens of thousands of COVID-19 infections, lockdowns have brought large swathes of the African economy to a standstill and treasuries across the continent are struggling to balance the need to finance expensive new public health programs while at the same time continue to pay down the nearly half a trillion dollars in debt that African countries collectively owe.
While negotiations are underway on how to reschedule payments owed to other countries (bilateral debt) and to international organizations like the World Bank and IMF (multilateral debt), it’s still not clear what’s going to happen to the $117 billion owed to private creditors, namely bondholders.
“Africa is facing a profound crisis that could set its development back a generation. It needs a solution to its debt problems that makes sure that no future African leader is forced to ask, as did former Tanzanian president Julius Nyerere: Should we really let our people starve so we can pay our debts?“
university of pretoria professor danny bradlow
A coalition of private creditors known as the Africa Private Creditor Working Group that represents the banks, mutual funds, and asset management firms who own most of those bonds said that it plans to work individually with African countries to reach a settlement. But since they made their first announcement in mid-May, there’s been no indication that any progress has been made.
Now, there are growing fears that if African governments can’t reschedule that bond debt they’ll be forced either to delay repayment or, worse, default. And it’s in situations like this that so-called vulture funds enter the market. These funds buy distressed debt from creditors at a steep discount and then go back to the borrowing country and force them to repay in full or face the prospect of being sued for even more money in a London or New York court depending on where the bonds were issued.
University of Pretoria law professor Daniel Bradlow hopes African countries can avoid this outcome. He joins Eric & Cobus to discuss his proposal on how to deter the debt vultures in Africa.
Show Notes:
- The Conversation: Vultures, doves and African debt: here’s a way out by Danny Bradlow
- Project Syndicate: Deterring the Debt Vultures in Africa by Danny Bradlow
- Reuters: Africa’s web of creditors complicates coronavirus debt relief by Joe Bavier and Karen Strohecker

Daniel D. Bradlow is Professor of Law at American University Washington College of Law in Washington, D.C and the SARCHI Professor of International Development Law and African Economic Relations at the University of Pretoria, South Africa. He is the Chair of the Roster of Experts for the Independent Review Mechanism at the African Development Bank, and a member of the Boards of Directors of ILEAP (International Lawyers and Economists Against Poverty) and New Rules for Global Finance. He is also a member of the Executive Council of the American Society of International Law.
His current scholarship focuses on global economic governance, the international financial institutions, creative financing for development, and the international legal issues that arise at the interface of large projects and sustainable and equitable development.