In a timely new report, Save the Children UK and Debt Justice UK have outlined the six critical reforms needed to fix the G20 Common Framework for Debt Treatments – the mechanism that helps countries restructure their debts. The report is backed by 11 international NGOs and coalitions, including Bond and Development Finance International, with H.E. Francisca Tatchouop Belobe, the Commissioner for Economic Development, Trade, Tourism, Industry and Minerals (ETTIM) at the African Union Commission setting the scene with a powerful foreword.
With the UK taking on the G20 2027 Presidency, a window of renewed opportunity has opened up to tackle an important piece of the global financial system. Taking leadership on these six reforms in the Presidency will require delivering on their promises to work in partnership, to strengthen the systems that underpin development and to use the full breadth of the UK’s strengths to drive sustainable growth and progress.
Unsustainable debt is a growing challenge for children
Whether exposed to heatwaves or hunger, climate shocks or inequality, children everywhere are growing up facing overlapping crises that threaten their wellbeing and survival. At precisely the moment when countries need to invest in climate resilience or health system strengthening, many lower-income countries are constrained by unsustainable and unaffordable external debt payments. These high debt payments are reducing the finance available for essential investments in health, education, climate adaptation and food security. Some countries are stuck in contexts where they cannot access important new borrowing but the consequences of repaying debts are taking a significant financial toll.
This is not just a moral plea. Our economies are connected. When countries default on their debts, the global economy becomes less secure. Instability grows, trade suffers and we risk more humanitarian crises – which will put increased pressure on our ability to respond to people in crisis through our constrained Official Development Assistance budget. Championing these reforms makes sense. We all benefit from a more stable global economy.
When the UK takes the reins of the G20 Presidency in 2027, we have the chance to fix the Common Framework
The G20 Common Framework was launched in 2020 to help countries facing high levels of external debts and interest. Over five years later, it’s failing to deliver timely and adequate debt relief. Only four countries have applied – and all remain in debt distress or at high risk of being so. These countries have spent years negotiating debt deals while continuing to face mounting pressures for spending at home. Other governments have been discouraged from applying altogether because the process is seen as slow, unpredictable and unlikely to provide enough relief.
That's why our joint report calls for these six key reforms:
- Countries should exit the process with much deeper debt relief.
- A suspension of debt payments during restructuring negotiations.
- Legislation to ensure no creditor can hold out from a restructuring. This action specific to the UK government would also ensure that creditors cannot sue or threaten to sue during debt restructuring negotiations.
- Clearer rules for burden sharing between all types of creditors when granting debt relief – so private creditors will grant their fair share of relief.
- A faster process.
- More transparency. Beyond the Common Framework process but highly relevant to it, is the need for much greater transparency on lending and borrowing between countries.
Debt relief could be transformative
The African Development Bank’s African Economic Outlook 2026 estimates that the money spent on repaying debts servicing costs absorbed more than 31% of government revenue across Africa in 2025, exceeding spending on health or education in many countries. Research from the Universities of St Andrews and Leicester shows how transformative debt relief could be for the 68 low-, lower-middle, and upper-middle-income countries in their model. They found that reducing external debt payments to 10% of government revenue could:
- avoid 378,918 under-five child deaths,
- prevent 34,767 maternal deaths,
- put over one million children through primary school,
- and give 15 million people access to water.
The time for action is now
The UK has real influence because around 90% of contracts for external private sovereign debt held by countries eligible for the Common Framework are governed by English law. This gives the UK a unique opportunity with the G20 Presidency.
There's a lot of discussion about what good international cooperation looks like. This is it. An important step towards fixing the global financial system is championing the six reforms outlined in this report.
The reforms are clear actions that G20 members, the World Bank and the International Monetary Fund could collectively and unilaterally take. Success should be measured by whether countries emerge with sustainable debts, renewed access to affordable finance, and the resources needed to invest in children and long-term development.
FAQs:
What is private sovereign debt?
Private sovereign debt is the money a country owes to a private lender, rather than to another country or government.
What is the G20 Common Framework for Debt Treatments?
The G20 Common Framework is a system that helps 73 eligible low-income countries fix their debt problems. Launched in November 2020, it brings together the countries and institutions that these nations owe money to — including government lenders such as France or China as well as private companies that lend money.
In short: it's a shared framework that enables nations that need to restructure their debt through reduced payments, more time to pay, or partial or complete debt cancellation, in a fair and coordinated way. It is currently failing to provide timely and sufficient debt relief.
Where did the debt come from?
External debt payments for lower-income countries are at the highest level since the mid-1990s. Much of the debt lower-income countries owe was built up over the past two decades as these countries borrowed money to build infrastructure like roads, hospitals, and power stations, and to cover gaps in their national budgets. Lenders included traditional lenders like Western governments and institutions, as well as newer major lenders like China, plus private banks and bondholders.
The latest cycle of unsustainable debt has gotten worse due to a run of global shocks: the COVID-19 pandemic hit economies hard and pushed up emergency borrowing, then rising interest rates made existing loans more expensive to repay, and currency devaluations meant countries needed even more of their own money just to cover debts priced in dollars. Combined with low export earnings and, in some cases, conflict or climate-related disasters, many countries now owe more than is genuinely sustainable – and they have little or no buffer to address future shocks without risking debt distress. Fixing the Common Framework could help break the cycles of unsustainable debt.
What is the G20? Why is the UK hosting it in 2027?
The G20 is a group of the world's largest economies plus the European Union and African Union, representing around 85% of global economic output. The G20 was established in 1999 in response to financial crises in the late 1990s, with the goal of promoting international financial stability. Leaders and finance ministers from these countries meet regularly to coordinate on major global issues, including trade, climate change, and international debt.
Each year, a different member country takes on the G20 Presidency, hosting meetings and helping set the agenda for that year. The UK will hold the Presidency in 2027, giving it a prominent opportunity to shape global priorities — including pushing for progress on sovereign debt reform.
