At the G20’s 20th meeting in Johannesburg in November 2025, the Declaration placed the African humanist Ubuntu philosophy – ‘I am because we are’ – at the centre of its framing for global economic governance.
This was more than rhetorical flourish. The statement reflects a convergence of analysis across multilateral institutions, how Africa’s economic trajectory has become central to global financial stability and the prevailing architecture is no longer adequate to manage the resulting interdependence. The coming year will determine whether this conceptual shift translates into institutional reform.
Structural pressures and the new consensus
Across 2025, a surprisingly coherent diagnosis emerged from the International Monetary Fund, the World Bank, United Nations Conference on Trade and Development and COP30. Developing countries paid an estimated $921bn in net interest in 2024, while approximately 3.4bn people now live in economies spending more on debt service than on health and education combined. These figures do not merely indicate cyclical stress; they describe a structural imbalance that is undermining fiscal resilience and suppressing long-term investment.
Rather than reverting to conventional discussions of temporary liquidity support, the emerging consensus centres on three mutually reinforcing shifts: the broader adoption of state-contingent sovereign instruments; the systematic correction of risk mispricing in African capital markets; and greater collective bargaining power among African borrowers. Together, these shifts represent an attempt to align the financial architecture with the macroeconomic realities African countries face.
State-contingent finance
For many African economies, volatility – not stability – is the baseline. Climate-related losses of 2-3% of gross domestic product per year, combined with commodity-price swings that add around 1.5% to fiscal volatility, create a macroeconomic environment poorly served by traditional debt contracts. The prevailing system compounds this instability by forcing sovereigns to borrow at elevated spreads, often above 700-900 basis points, when their repayment capacity is at its weakest.
State-contingent instruments provide a design-based response. By suspending payments when independently observable triggers, such as rainfall deficits, commodity price collapses or GDP contractions, are breached, they transform sovereign borrowing from a procyclical amplifier into a countercyclical stabiliser. Model-based simulations indicate potential reductions in fiscal uncertainty of roughly 18-22%. Trevor Manuel’s Africa Expert Panel has outlined operational templates that rely on verifiable data sources and minimise the risk of discretionary activation. Nigeria’s experience illustrates the stakes: avoiding three emergency borrowing episodes per decade could save approximately $4.2bn – resources equivalent to the cost of immunising all children in West Africa.
Correcting systematic risk mispricing
A second pillar of reform addresses a long-standing anomaly: African infrastructure investments generate high returns, 22.4% on average in International Finance Corporation samples. Yet, African sovereigns continue to face borrowing costs 400-500bp above peers with comparable repayment histories. Part of this discrepancy reflects structural features. Still, a major share stems from the concentration of sovereign credit assessments among three major rating agencies whose methodologies often overstate macro-financial risk in African contexts.
The sovereign-ceiling convention, which prevents private borrowers from being rated above their sovereign even when fundamentals warrant stronger ratings, remains particularly distortive. Kenya’s mobile-money ecosystem, with default rates around 0.3%, continues to face misaligned borrowing costs. The African Credit Rating Agency, established in 2025, has begun systematically documenting these inconsistencies.
Under upper-bound estimates, correcting the most distortionary methodological assumptions could unlock between $2-3tn in productive investment over a decade, figures consistent with the continent’s infrastructure financing gap and the cumulative impact of lower sovereign spreads and improved project bankability.
This recalibration gains further significance as energy-transition dynamics evolve. Africa possesses roughly 70% of global cobalt reserves and around half of global manganese deposits – minerals essential to electric vehicle batteries and steel production. COP30’s valuation of carbon sequestration in the Congo Basin at approximately $150bn annually underscores the extent to which African ecological assets underpin global climate stability. Yet current risk models seldom incorporate these structural contributions.
Coordinated bargaining
Fragmented negotiation has historically reduced African borrowers’ leverage, leaving them exposed to higher spreads and less favourable contractual terms. Concentrated creditors, whether private bondholders or official lenders, benefit structurally from unified positions. The Borrowers’ Club, to be formally launched in Addis Ababa in early 2026, aims to correct this asymmetry. By standardising key clauses, sharing contract templates and synchronising restructuring timetables, participating countries seek to narrow information asymmetries. Early modelling suggests that such coordination could reduce refinancing costs by 125-175bp, equivalent to around $11bn annually on current external debt stocks.
The initiative coincides with a reassessment inside the IMF. Africa’s present 5.2% voting share sits awkwardly alongside the fact that African countries account for roughly 40% of the IMF’s outstanding lending. Movement towards an 8% voting share, while still modest relative to broader reforms required, would represent a meaningful shift in global economic governance.
Figure 1. Africa’s systemic position
| Indicator (2024-25) | Africa’s position | Sources |
| Share of IMF lending exposure | ~40% of outstanding IMF credit | IMF Financial Statements (2024–25)⁴ |
| Share of global net interest payments (developing economies) | ~22% attributable to African borrowers | UNCTAD World of Debt 2025¹ |
| Share of global cobalt reserves | ~70% of known reserves | USGS Mineral Commodity Summaries (2024) |
| Share of global manganese reserves | ~50% of global reserves | USGS Mineral Commodity Summaries (2024) |
| Average infrastructure returns | 22.4% (IFC project sample) | IFC Creating Markets in Africa (2025)³ |
| Countries spending more on debt service than on health/education | 54 globally, majority in Africa | UNCTAD¹; UNESCO education and health data |
Sources: IMF, UNCTAD, USGS, IFC, UNESCO education and health data
Figure 1 illustrates the core argument: Africa is simultaneously system-exposed and system-critical. Its macroeconomic vulnerabilities cannot be separated from its strategic resources, demographic trajectory or ecological role.
Remaining gaps
Despite stronger analytical convergence, three weaknesses persist. Technology remains insufficiently integrated: blockchain-based registries, artificial intelligence-driven risk analytics and automated smart-contract triggers could materially reduce transaction costs but remain underdeveloped in global standards. Private-creditor incentives remain poorly aligned with systemic requirements, particularly given that private lenders hold roughly 61% of Africa’s external debt. The risk of holdout behaviour, seen in several recent sovereign cases, remains significant. Oversight mechanisms also lag behind ambition. Historical G20 compliance averages around 15%; without transparent monitoring, political commitments may not translate into implementation.
Inflection point
The year ahead constitutes a decisive test. The launch of the Borrowers’ Club in Addis Ababa, the design of a new refinancing mechanism in April 2026 and the IMF quota review later in the year form a sequential assessment of political resolve and institutional capability. Whether the philosophical framing articulated in Johannesburg becomes embedded in practice will depend on decisions taken over the next 12 months.
Ubuntu economics does not invoke moral claims. It advances a structural argument: Africa’s demographic momentum, mineral endowments and ecological assets are central to global prosperity, and instability in the region imposes system-wide costs. The reform frameworks are now primarily in place. The question is whether the political and institutional conditions of 2026 permit their implementation.
If this alignment holds, Africa’s reform agenda could mark the most significant recalibration of global finance since the early 2000s. If it falters, the system will remain constrained by an architecture increasingly misaligned with the realities of an interdependent world.
Udaibir Das is a Visiting Professor at the National Council of Applied Economic Research, Senior Non-Resident Adviser at the Bank of England, Senior Adviser of the International Forum for Sovereign Wealth Funds, and Distinguished Fellow at the Observer Research Foundation America.
Green hydrogen needs blue thinking
The challenge is to produce green hydrogen without depleting water reserves. Using seawater could be a viable alternative.
It is not often that a single molecule captures the imagination of an entire nation. But hydrogen — the lightest element on Earth — is suddenly carrying the heaviest expectations of India’s clean-energy transition. In global climate conversations, it is no longer a whisper; it is a thunderous promise. As India races to unlock vast renewable capacity and industries chart their decarbonisation paths, green hydrogen is emerging as the fuel that could power factories, clean up refineries, and propel long-haul transport without carbon emissions.
At the centre of this vision is the National Green Hydrogen Mission, led by MNRE with support from key ministries, which targets five million tonnes annually by 2030, backed by hydrogen valleys, industrial parks, and electrolyser manufacturing. Confidence is high that India can meet its climate goals and shape global supply chains — yet beneath this excitement lies a quieter, more fragile reality.
India’s green hydrogen ambition faces a stark water-energy paradox. Electrolysis demands nearly nine litres of purified water per kilogram of hydrogen, far more when accounting for cooling and purification losses. Yet, India already extracts one-quarter of the world’s groundwater (more than China and the US combined), with aquifers falling by up to four metres due to subsidised farm pumping. Several States blessed with intense solar radiation — ideal for powering electrolysers — are simultaneously cursed with extreme water stress. This includes Rajasthan, Gujarat, Odisha and Tamil Nadu.
Hydrogen plants are rapidly emerging — from Kandla and Kutch to Gorakhpur, Bikaner, Mangaluru, Thoothukudi, Gopalpur and soon Andhra Pradesh, alongside inland sites in Hisar and Baddi. But geography matters: producing six million tonnes of hydrogen could demand 132–192 million tonnes of water annually, rivalling major cities’ drinking needs. Therefore, the challenge then is not whether India can produce green hydrogen. It is whether it can produce it without taxing the water on which lives and livelihoods depend.
Hydrogen without regret
The answer to this dilemma is not to slow the hydrogen mission — but to site it smarter, design it wiser, and power it circularly. Coastal hydrogen hubs can draw seawater rather than freshwater. Global footprints are turning to the ocean to fuel the hydrogen revolution — from Scotland’s EMEC, which has produced hydrogen from tidal energy and seawater since 2017. Other projects in Australia, Singapore, Norway, and France that integrate seawater electrolysis with offshore renewables. These initiatives demonstrate how coastal and marine energy systems can enable sustainable hydrogen production without depleting scarce freshwater reserves.
India should follow these footsteps, creating an innovative method to produce hydrogen from alkaline seawater using low-cost, corrosion resistant bimetallic catalysts — a breakthrough that circumvents the chloride corrosion typically associated with saltwater electrolysis. A novel global experiment has demonstrated that replacing the traditional, high-cost metallic positive electrode with a non-metallic, low-cost alternative is feasible. This low-cost, high-performance solution could redefine the future of seawater electrolysis, with the capacity to produce green hydrogen at an industrial level. This would enable India to scale up its coastal hydrogen plants sustainably, transforming its vast shorelines into hubs of green innovation.
Scaling such coastal hydrogen systems demands evolved policy: coordinated MNRE–Jal Shakti planning, hydrological budgeting, water use audits, and incentives for non-freshwater inputs. Ports such as Kandla, Paradip, and Thoothukudi could become hubs for green ammonia exports, while inland plants should rely on treated wastewater rather than groundwater.
India’s hydrogen story is a rare convergence of industrial ambition, climate necessity, and geopolitical opportunity. If India pulls too hard on the “hydrogen rope” without easing the “water knot,” the transition risks swapping carbon scarcity for water scarcity.
Pohit is a Professor, and Mondal is a Research Associate at the NCAER. Views are personal.
Health SDGs are at risk from climate change: Evidence from India
Climate change poses significant risks to human health in India, with 80% of the population located in areas highly vulnerable to extreme events, such as cyclones, floods and heatwaves. While India has made progress on several Sustainable Development Goals (SDGs), risks from climate change can undermine the achievements. This study examines the impact of climate vulnerability on health related targets under the SDG2 on Zero Hunger and SDG3 on Good Health and Well-being. Statistical and econometric methods including a multivariate logistic regression are used to examine the relationship between climate vulnerability, social and economic determinants of health and health outcomes in 575 districts of rural India. 2 national datasets are used for the analysis, namely, a health survey and a climate risk and vulnerability assessment, with a sample size of 154,547 children and 447,348 women. A highly significant and negative relationship is found between climate vulnerability and attainment levels of health outcomes. Districts that are highly vulnerable to climate change consistently underperform on the studied health targets as compared to districts which are less vulnerable to climate change. For instance, the chance of children being underweight and that of women having non-institutional deliveries, is 1.25 and 1.38 times higher, respectively, in districts that are highly vulnerable to climate change than districts that are less vulnerable. While the extent of the adverse impact varies, the findings establish the necessity to take account of the adverse impacts of climate change on health outcomes, apart from the socio-economic and access related factors that have conventionally been considered as relevant in influencing these outcomes. in LMICs like India. There is an urgent need for timely action to address climate change risks, including effective adaption in health, to ensure that the desired health and well-being outcomes can be achieved and sustained, amidst rising climate risks.
Flexibility and workers’ rights in a platform set-up
The regulation should ensure that flexibility is for real, with no incentive structure that seeks to distort it.
What does the word ‘flexibility’ mean in the context of platform work? The two stakeholders, platforms and the workers, are debating the term. The platforms argue they offer ‘flexibility’ but workers disagree.
But both the workers and platforms are right because they are talking about different things. The platforms refer to the flexibility between various jobs, i.e., the worker can work across multiple platforms or work partially in a traditional job and partially in a platform.
In contrast, the workers are talking about flexibility at work i.e., the ability to choose how much to work, what hours to work and what locations to work on the platform.
The platforms’ concept of ‘flexibility’ is neither novel, nor driven by the presence of a networking platform. It has always existed in India. There is overwhelming research evidence that workers especially in developing countries like India hold multiple jobs (Choudhuri, 2021). The Code on Social Security 2020 further recognises non-traditional work.
Beyond pensions and health insurance that the Code on Social Security 2020 promises, the Central and State Governments should develop metrics to assess the flexibility-at-work of platform workers across different sectors and companies. If the platform fails the flexibility test at work, one needs to ask whether workers may be classified as ‘partners’.
There should be tests to evaluate whether payments to platform workers distort the incentives to flexibility. In the end, flexibility is just another feature of platform work. There are other features that also need to be evaluated/assessed to get a sense of work conditions of platform workers.
Concept of ‘flexibility’
The novel concept of ‘flexibility’ that a platform offers (for example, a food delivery platform) is allowing the worker to choose the number of days they want to work, the specific days the workers want to work, the shifts they want to work (hours of work), the timing of operations and place of work (zones). A platform typically divides a larger city into various zones and the platform worker is free to choose to work in a particular zone when they sign up. Workers have some degree of choice in the time and location where they can work in contrast to a traditional job, where time and space are fixed and non-negotiable.
The test for the policymaker is to determine the actual choice a worker has in any particular platform and the test comes up when the worker wants to change any of the variables. How easy is it to change, if at all? There should be a manifest trade-off between flexibility and wages, without the worker signing up for a traditional job in the garb of flexible work.
In the NCAER Food Delivery Platform Report 2023, we had probed workers on four aspects of flexibility: perception of flexibility in their work, desire to change work arrangements (such as zones and work shifts), ease of the process, and the importance to them of flexibility in their work. About a third of workers cited flexible work hours/days as a reason for joining the platform (28.4 per cent), but the percentage was higher for Tier 3 city workers (44 per cent).
A majority of workers expressed satisfaction with the flexible work norms in terms of easily changing the time, duration and zone to suit their convenience. (About 76 per cent of the workers found it highly or moderately flexible.) About 16 per cent said that ‘flexibility was not an option because one had to work the long shift to meet family expenses’. About 44 per cent of the workers who tried to change shifts found it either moderately easy or extremely easy to change shifts.
While this particular food delivery platform is deemed to be ‘flexible’, what about other platforms in this sector and other sub-sectors? More data is necessary to improve the rights of workers in the platform economy.
The writers are faculty, NCAER, Delhi. Views are personal.
India Human Development Survey: November 2025
The IHDS Forum is a monthly update of socio-economic developments in India by the IHDS research community, based on the India Human Development Survey, jointly conducted by NCAER and the University of Maryland. While two earlier rounds of the survey were completed in 2004-05 and 2011-12, respectively. Fieldwork for the third round was undertaken in 2022-24 and the data is currently being cleaned and processed.
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