In the communiqué issued at the end of the side-event, participants expressed concern about the depth and the impact of the crises:
“Amid falling prices of raw materials, recession, and now COVID-19, Africa is in serious trouble as debt burden grows. According to World Bank data, 18 countries are at high risk of debt distress – a number that has more than doubled since 2013 - while eight countries are already in distress. The COVID-19 pandemic has worsened the situation. The issue is not about how much debt has been accumulated, but rather the high servicing cost driven by higher borrowing rates.”
The organizers expressed concern about:
“…the added burden of climate loss and damage that is already costing developing countries $250 bn a year and the bill could reach $700bn a year by 2030.
There is an evident need to shake off the grip of debt and austerity policies, and dramatically expand financing for essential public services and sustainable food systems in order to recover from COVID-19 and build climate resilience: for a comprehensive health response and mass vaccination, to prevent an education crisis, dramatically expand social protection, and strengthen food security. The upcoming African Finance Ministers conference must take decisive action on these issues.”
There are reasons for questioning the legitimacy of part of the foreign debt of the continent.
In their “Call to Action”, the CSOs proposed various ways of ensuring the availability of sufficient financial resources to enable the continent to acquire vaccines and advance the post-COVID transition to a better world.
“We applaud the demands of finance ministers to support the IMF issuing $2 trillion in Special Drawing Rights which could provide $250 billion to Africa – providing urgently needed revenue for the Covid-19 response. In addition, we call on African finance ministers to demand broad debt cancellation to the end of 2022 and insist that if such is not forthcoming, the governments will have no choice but to initiate a collective and comprehensive “debt strike.”
There is also a clear need to intensify the struggle to “stop the bleeding” of the continent through illicit financial flows from the continent.
Other important short-term measures in the « Call to Action » include the following:
- - “Pharma companies to ensure equity in licensing to manufacturers in the global south and transparency in supply and pricing of vaccines in the crisis and to rapidly ramp up production of affordable generic vaccines.
- Patent-free vaccines »
Furthermore, Kenya will host the next conference of the Global Partnership for Education in July 2021, whose objectives include raising five billion dollars to replenish the education fund.
This side-event is one of several initiatives aimed at addressing the challenges related to the huge debt burden that the continent is carrying. Part of the problem is the fact that the debt is in foreign currencies, and it has not been used to finance transformative and equitable development. Some of the solutions being proposed (such as the issuing of trillions of dollars in SDRs by the IMF), ought to be given very careful consideration.
The partner civil society organizations (CSOs) that organized the side-event have decided to continue the collaboration and are calling upon all CSOs to join them, in the spirit of pan African solidarity, so as to, among other things, conduct debt audits at the national level, and continue engaging African governments, through the ministers of finance and development, and the donors together, but also to ensure that there is “better involvement of African Civil Society Organizations in the negotiations for the implementation of the African Continental Free Trade Agreement” (ACFTA).