Dakar, the capital of Senegal, is set to host a continental conference that aims to reflect on the growing debt tragedy of African countries and possible solutions.
The 3rd edition of the African Conference on Debt and Development (AfCoDD III) is scheduled to take place from 30th August to 1st September 2023. Organized by the African Forum and Network on Debt and Development (AFRODAD) and its partners, the conference is themed, “The 4Rs for Africa Rule-Maker: Reimagining, Rethinking, Reorganizing, and Remobilizing for an African world order”.
The organizers of the conference argue that Africa’s perpetual crisis mode and dependency policy making approach needs a rethink. Calling for reforms of the global financial architecture that governs public debt; seeking meaningful debt solutions; and urging for the sealing of financial leakages are among the objectives of the conference.
“At the start of 2023, the Republic of Ghana became the fourth African (fifth globally) to apply for the G20s Common Framework for debt relief and restructuring. This came about following the country defaulting on it Eurobond and was swiftly accompanied by a downgrade by credit rating agency Fitch. The Republics of Chad, Ethiopia, and Zambia have suffered a similar fate since 2020. Across the continent, several countries are beginning to show similar symptoms that indicate either defaulting or needing to apply to G20 Common Framework. This situation is graver than what meets the eye. Africa’s debt burden is directly becoming a burden on Africans who are having to pay the price both irresponsible borrowing and equal irresponsible lending,” states the concept note of the conference.
”Yet, despite the debt burden, institutions like the International Monetary Fund (IMF) continues to provide loans under the guise of “highly concessional” loans to our African governments. Africa is caught in a debt trap that extends beyond contraction in fiscal policy space. Africa is trapped in a low productive capacity trap that is entrenched by the neo-liberal economic order that blocks any attempt for Africa to produce and transform its economies in manufacturing and industrial hubs for global production,” it said.
The organizers of the conference believe that debt is the single most important variable that has impacted on the way in which neo-colonialism has been entrenched on the African continent. “To escape this vicious cycle, we as Africans and as Africa need to find ways out of the short-termism of macroeconomic planning, enhance production and industrialization, increase domestic resource mobilization, and reinforce African agency both inwardly and externally,” they stated in the concept note of the conference, which will be also be live streamed on social media pages of AFRODAD.
The latest UN report on global debt burden, indicated that in 2022, global public debt – comprising general government domestic and external debt – reached a record USD 92 trillion. It indicated that the number of countries facing high levels of debt has increased sharply from only 22 countries in 2011 to 59 countries in 2022.
The report reveals that Africa borrow on average at rates that are four times higher than those of the United States and even eight times higher than those of Germany. It also stated that developing countries are more exposed to external shocks due to borrowing in foreign currencies according to the UN report.
As a solution to deal with global debt burden, the UN report calls for three major actions: tackling the high cost of debt and rising risks of debt distress; massively scaling up affordable long-term financing for development; and expanding contingency financing to countries in need. “The implementation of these actions is crucial to unleash the resources needed to build a more prosperous, inclusive, and sustainable world,” the UN report suggested.
Launched in August 2021, AfCoDD is one of three flagship programs run by AFRODAD that seeks to bring together all African citizens to discuss, debate, and decide Africa’s path towards economic, political, and social self-determination.