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The fourth International Conference on Financing for Development (FfD4), currently underway in Seville, Spain, has unveiled a new borrowers’ forum designed to assist debt-distressed countries.
It will establish a platform for countries to share knowledge and experiences of best practices, provide advice and enhance the effectiveness of their representation and voice in international forums.
It is one of the 11 actions proposed by the United Nations Secretary-General’s Expert Group on Debt, appointed by the UN Secretary-General António Guterres in December 2024. The group was tasked with identifying pragmatic and actionable solutions to the debt morass for the Seville conference.
“The absence of a dedicated platform for sharing knowledge and elevating the collective voice of debtor countries has long been recognised as a critical gap in the international financial architecture,” read the expert group’s report.
A borrowers’ forum, it added, can address this gap by enabling a platform for peer support and experience sharing. It can help rebalance the global debt governance by amplifying the collective voice, knowledge and advocacy of debtor countries.
The announcement comes as 3.4 billion people live in countries that spend more on interest payments than on critical social services such as health and education in 2024. “Twenty one countries devote 10 per cent of their GDP to interest payments. This is not sustainable. Debt might be silent but does not mean it’s not urgent,” said Carlos Cuerpo, Minister of the Economy, Trade and Business, Spain, at a press briefing on July 2 at FfD4.
Some 35 countries have been identified as being in or at a risk of debt. This figure has remained constant for two years till March 2025. However, 26 of them (74 per cent) have remained in this situation since at least 2018, raising questions on whether current mechanisms are working.
Only four countries — Chad, Ethiopia, Ghana, and Zambia — have sought restructuring under the G20’s Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative. It was set up in 2020 to help debt restructurings to low-income countries, with broad creditors’ participation. Debt restructuring is used by creditors to grant a concession to the debtor in financial difficulty in accordance with a mutual agreement.
Through the borrowers’ forum, countries can learn from one another and coordinate their approaches in debt management and restructuring, Guterres said. “I look forward to working closely with Member States — including the G20 — to bring this forum to life, to empower borrower countries, and create a fairer system,” he added.
During the July 2 press briefing, Rania Al-Mashat, Egypt’s Minister of Planning, Economic Development and International Cooperation, elaborated on how the forum could help.
She said countries that had successful debt swaps, for example, should share how they achieved that in terms of governance as creditors and modalities of agreement are different. She explained technical assistance and capacity building is important and the former can be translated into a financial and monetary value. She also added that Egypt had successful debt swaps with Germany and Italy.
Debt swaps are agreements between a government and one or more of its creditors to replace existing sovereign debt with one or more liabilities that include a spending commitment towards a specific development goal, according to the World Bank.
Mulambo Haimbe, Minister of Foreign Affairs and International Development, Zambia, told the press that the country has taken bold measures, which “have marked turning point in restoring us as a country down the sustainable growth trajectory.”
For countries to break free from the "debt morass" that threatens economic stability, social progress and sustainable development, the expert groups noted four outcomes need to be achieved. These include lowering the cost of new financing, increasing the volume of, and access to, new sources of long-term financing, reducing the cost of servicing existing debt and reducing levels of existing debt.
