When an African government faces debt distress, where does it turn for advice? Increasingly, the answer has been: Paris, London or New York. Firms including Lazard, Rothschild & Co, Global Sovereign Advisory and Newstate Partners have become familiar names in sovereign debt negotiations. Lazard alone says it has advised governments in nearly 80% of sovereign debt restructurings worldwide over the past two decades. Since 2020, its African clients have included Zambia, Ghana and Ethiopia, among a wider group of sovereigns whose restructurings together covered approximately $200bn in claims worldwide.
But why does sovereign debt advice so often leave the continent when African governments are making decisions about their own financing and development? And does it matter?
The role of international advisers in African sovereign debt developed alongside an international debt architecture that was itself designed outside the continent. During the 1980s debt crisis, governments negotiated claims through the Paris Club and London Club creditor committees. From 1996, the Highly Indebted Poor Countries (HIPC) Initiative placed IMF and World Bank analyst-determined Debt Sustainability Assessments (DSAs) at the centre of relief. The post-2006 Eurobond boom deepened that dependence, tying African governments to ratings agencies and to bonds issued under London or New York law.
This helps explain why international expertise is given such weight, with firms becoming embedded across the African sovereign financing cycle - from market access and credit ratings to debt restructuring. Ethiopia illustrates this continuity: the same international adviser supported the country in securing its first sovereign credit rating and issuing its $1bn inaugural Eurobond, before later supporting restructuring negotiations with bondholders.
Originally published by African Business.