The Legal Basis to Reject Odious Debt

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Oct 26, 2011

Léonce Ndikumana and James K. Boyce: International law supports Africa rejecting debts that did not benefit the people


The Legal Basis to Reject Odious Debt  lies in the principle of “odious debt” in international law, which holds that debts incurred by regimes without the consent of the people and not used for their benefit should not be legally enforceable. This concept—first formally articulated in the 20th century by legal scholar Alexander Sachs —suggests that if a debt meets three conditions, it can be declared null and void:

  1. Lack of consent from the population;

  2. No public benefit from the debt;

  3. Creditor awareness of the illegitimacy of the borrowing regime or purpose.

For African countries, many loans taken under colonial or authoritarian governments (or corrupt administrations) meet these criteria. Some legal precedents and international cases—such as the repudiation of apartheid-era debt by post-apartheid South Africa and Ecuador’s audit and partial cancellation of illegitimate debt—reinforce this argument.

Though not yet codified into binding international law, sovereign legal and moral arguments provide African nations with a strong basis to audit, challenge, and potentially reject odious debts—asserting their right to economic justice, sovereignty, and reparative development.