As public debts are increasing in many African countries, we see a new type of debt distress, where short-term commercial loans and bonds have replaced some of the long-term multi- and bilateral loans. This policy note highlights two topical questions: what lies behind increasing levels of debt in Africa, and what are the challenges when financing development projects through loans? Policy recommendations (in short): Debt transparency Better maturity matching Balance revenues and costs Prioritise investment projects and beware of white elephants Reject pro-cyclical fiscal policies