BY ANDUALEM SISAY GESSESSE / JOHANNESBURG – The African Union (AU) is urged to take the leadership and help member states to craft a uniform debt contract template that protects the African people from being ripped off their wealth due to unfair and bad loan contracts.
This is stated during the 5th round of African Media Initiative organized by African Forum on Debt and Development (AFRODAD) and African Monitor last week in Johannesburg, South Africa bringing together journalists from 31 African countries.
“Our African nations are borrowing from private lenders. If you are looking a 100 percent of the debt that sovereign nations are attracting, more than 40% is debt that they are taking from private creditors. That is very serious and alarming,” says Lyla Latif, International Consultant on Taxation.
As most of the time the creditors who give the money are the ones who design such debt contracts, the contracts are unfair and lead to huge loss to African countries and their people when these countries fail to pay the debt according to those contracts, argues Lyla Latif.
“It is very important for the governments to show us (the public) the debt contracts… Transparency can support in a lot of ways to show the way in which the government is collateralizing its loan its loan,” she said stressing the need for the public to be aware of how African government get loans.
“At the African Union, we have the African Continental Free Tarde Area agreement that is signed. That is a potential move for Africa to become harmonious. AFRODAD has the borrowing charter, which provides African countries with a charter, which provides African countries with a guideline on how we need to structure public finance management system. So that they (African governments) bring about that level of transparency that is needed in the debt,” she said.
At the UN, we are seeing developing countries come together to decide that we want new tax laws. So the same thing with debt; Africa can take leadership. We an be rule maker. We can choose to create the table that we want to set out to design our debt going forward. So, the AU must take the leadership,” Lyla Latif, urged.