By Cheikh Fall, Founder of The Third Path Africa
The IMF’s recent policy paper on development finance (The 4th Financing for Development Conference—Contribution of the IMF to the International Financing for Development Agenda, published June 5, 2025) offers a sobering diagnosis: the poorest and most fragile states are falling further behind, buffeted by pandemic aftershocks, debt distress, geopolitical tensions, and declining financing flows. The analysis is sound, highlighting how low-income and fragile countries have been disproportionately affected by shocks since 2020, with debt vulnerabilities constraining critical spending on development. But the prescription remains incomplete, as it overlooks the essential role of African agency in designing, financing, and implementing solutions.
At Third Path Africa, we welcome the IMF’s call for increased grants, concessional loans, and technical assistance to address these challenges. These are necessary steps—but not sufficient. What’s missing is a fundamental shift from external support to sovereign design, where the Global South, particularly Africa, takes the lead in authoring its development future. Without this, even well-intentioned interventions risk perpetuating dependency rather than fostering self-reliance.
The IMF rightly notes that 38 “more advanced” low-income countries grew at 5.3% between 2022 and 2024, while the poorest 32 lagged at 3.3%, and fragile states at just 2.6%. This divergence reflects a financing architecture that rewards investment-readiness and penalizes structural vulnerability. Half of low-income countries are now at high risk of debt distress, with debt service costs crowding out investments in health, education, and infrastructure. The IMF estimates that developing countries face a $4 trillion annual financing gap to achieve the Sustainable Development Goals (SDGs) through 2030, with Africa bearing a significant share due to climate vulnerabilities and commodity dependence. Our recent commentaries on the Seville conference (June 30–July 3, 2025) argue that the current system prioritizes short-term fiscal metrics over long-term, continent-led priorities.
Africa’s development financing landscape remains dominated by external actors—multilateral banks, bilateral donors, and private equity firms—whose priorities often diverge from the continent’s long-term interests. While infrastructure is touted as the backbone of development, the design, financing, and delivery of these systems are rarely under African control. This disconnect perpetuates fragmentation, dependency, and misalignment with continental goals, such as those outlined in the African Union’s Agenda 2063 or the African Continental Free Trade Area (AfCFTA).
The IMF’s emphasis on institutional capacity is welcome, including proposals to boost tax-to-GDP ratios by up to 5 percentage points over the next decade and to expand capacity development, which has grown significantly for fragile states. But capacity must serve sovereignty. Tax reform and public financial management are tools—not ends. Without narrative control and political agency, even efficient systems risk becoming conduits for external priorities. For example, the IMF’s Poverty Reduction and Growth Trust offers concessional lending reforms, but these must be co-designed with African institutions, such as the African Development Bank, to align with regional needs. Botswana’s prudent management of natural resource revenues, which has built sovereign wealth funds to support domestic priorities, and Senegal’s budget transparency reforms, which align expenditures with national development plans, show how African-led models can succeed. Scaling these approaches continent-wide—through regional platforms like the AfCFTA or AU-led policy frameworks—could empower other nations to prioritize sovereignty over external dependency.
Development finance must serve sovereign goals, not just balance sheets. African agency means African-led coalitions—encompassing governments, civil society, private sector actors, and regional bodies—driving financing mechanisms. This includes platforms for input into IMF surveillance and debt restructuring, such as the Global Sovereign Debt Roundtable, to reflect African realities. A broad coalition of institutions, communities, and leadership must author this shift, ensuring development finance aligns with African priorities and decision-making power. Africa’s leadership in co-designing finance systems could also inspire similar models in Latin America or South Asia, strengthening Global South solidarity in global financial reforms.
The international community must move beyond catalytic language and voluntary guidelines. It must commit to enforceable design principles, such as AU-led oversight of financing agreements to ensure alignment with regional priorities, recurrent financing mechanisms, and regional leadership. Practical steps include: establishing binding targets for recurrent financing under African oversight, such as allocating a fixed percentage of multilateral development bank loans to African-led funds; creating enforceable commitments for co-designing capacity-building programs with local expertise; and prioritizing regional platforms like the AfCFTA in debt relief frameworks to align restructuring with continental integration goals. These measures would address misalignments, ensuring investments support climate-resilient infrastructure and gender-inclusive policies.
Organizations committed to African sovereignty, like Third Path Africa, stand ready to support this future through collaborative efforts. By empowering African voices as architects, not just stakeholders, we can build a more equitable and resilient development finance system.