A quiet but crucial battle is unfolding in global finance over the preferred creditor status of Africa’s development banks—a designation that ensures they’re repaid first during crises, supporting their ability to lend affordably. Institutions like Afreximbank and the Trade and Development Bank now face skepticism from global players such as the IMF, Paris Club, and JP Morgan, who question whether they deserve this protection, arguing that they are too small. Yet, this status is actually more legally secure for African banks than for their international counterparts, as it is enshrined in binding treaties. Analysts warn that undermining the preferred creditor status of Africa’s development banks could raise the continent’s borrowing costs and weaken financial sovereignty. Experts urge African nations to defend this legal standing collectively, ensuring the continent retains control over its development financing future.
The Conversation
