How the IMF structured Africa's sovereign debt crisis as a de facto bail-in for the global south

Over the past two decades, Africa's sovereign debt landscape has undergone a fundamental transformation. It was actively shaped by policy advice and strategies championed by the International Monetary Fund (IMF) and the World Bank. A critical but underexplored aspect of this evolution is how the IMF encouraged African governments to access international capital markets. This option was framed as international effort for Africa to diversify financing sources, reduce dependency on concessional loans and instill market discipline. On the surface, this seemed prudent. However, beneath the macroeconomic rationality was a strategic design. Encouraging African sovereigns to raise capital from private creditors effectively created a layer of subordinated private debt, without which, it would not be possible to demonstrate preferred creditor treatment. This is similar to how banks use subordinated capital to absorb losses and protect senior stakeholders.