Two decades ago, the world was in the grip of a great debate over debt and debt cancellation in Africa. Total public debt stock had climbed to nearly $300bn by 2002 from $40bn in the two decades prior. Jubilee Debt Campaigners insisted on immediate cancellation. The Pope concurred.

Today, Africa’s external debt alone exceeds $700bn. Campaigners are back asking for cancellation. And the Pope again concurs. It would seem as if nothing at all happened in the intervening 20 years. Yet quite a bit did.

After intense criticism of earlier designs and subsequent brainstorming, additional resources were injected into the Highly Indebted Poor Countries (HIPC) and Multilateral Debt Relief Initiative (MDRI) set up by the Bretton Woods institutions and their rich country partners in 2005. Nearly $125bn, to be precise.

Between 2000 and 2015, 31 African countries (out of 36 beneficiary countries) had substantial portions of their total debt wiped out. For example, both Malawi and Liberia saw 90 per cent of their external debt cancelled. Sierra Leone received about 95 per cent relief. Bigger economies like Ghana experienced a lower, but still impressive, decline in debt stock of about 70 per cent.

It is surprising, in view of these facts, to see a brand-new debt cancellation campaign ignore lessons learnt from previous rounds of debt relief and their impact on economic growth and transformation.

Some African countries — including Kenya, Angola and Nigeria — were considered ineligible for HIPC for various reasons. None of them are among the countries, all big HIPC beneficiaries, that have been compelled to seek debt restructuring recently.

Unmissable in this fuzzy picture, however, are the major shifts that have occurred in global development financing. Three decades ago, sub-Saharan African countries owed roughly 80 per cent of their debt to the so-called official creditors — rich countries and multilateral finance institutions.

Today, I estimate the countries with the biggest debt burdens tend to owe more than 70 per cent of their obligations to domestic private investors, international bondholders and not-so-rich countries such as China, India and Turkey.

Consequently, whatever the merits of the debt cancellation campaigns, yesterday’s arguments seem ill-fitting today.

Ghana’s dramatic debt restructuring effort of recent weeks began on the domestic front last December. It has involved pensioners and trade unions adamant that not a penny from their bond holdings will go to support the government’s debt relief efforts. Seventy-five per cent of Ghana’s debt servicing expenses cater for domestic creditors. What would be the point of debt cancellation that failed to address this reality?

Now that Paris Club and Bretton Woods creditors are responsible for a significantly lower proportion of the debt, some campaigners are focusing more on commercial creditors in the west. While it is true that rich banks do hold some African sovereign bonds, quite a lot are also held by institutional funds whose money comes from ordinary pensioners and workers.

It is safe to say that a cancellation campaign in the current circumstances will have to do more than suggest that the creditors won’t miss the money. The humanitarian argument about how high debt servicing takes away money from social services remains compelling, especially in countries such as Ghana and Nigeria where debt service costs are approaching 70 per cent of domestic tax revenues. But questions do arise about where the returns on the borrowed billions have gone.

Ghana’s leaders, for instance, have faced widespread criticism for prioritising a “national cathedral”, complete with a “Bible museum” and “biblical gardens”, that could cost upwards of $1bn, in the middle of a struggling debt restructuring exercise.

Despite repeated assurances to the IMF, which has provided a bailout to the country roughly every four years since independence, to pass all public spending through a national accounting platform, nearly 90 per cent of Covid-19 expenditures bypassed it.

In 2003, Ghanaian-born economist Elizabeth Asiedu published a paper in which she predicted that debt relief would have minimal impact on the HIPCs due to weak institutions. That prediction now looks prophetic.

However emotionally appealing it may sound, debt cancellation alone will not encourage or enhance efforts, already underway in many African countries despite everything, to demand stronger accountability and force much-needed institutional reform.