Climate Change: Stakeholders Urge Africa To Tackle Debt Issues

Philip Daniel Yatai
Oct, Thu, 2023

Economy/Business

Climate change: Stakeholders urge Africa to tackle debt issues

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By Lucy Ogalu

Some stakeholders have emphasised on the need for Africa to tackle debt issues to enable the continent to fix its increasing climate issues.

They spoke in an opinion piece “If You Want Our Countries to Address Climate Change, First Pause Our Debts” featured in The New York Times.

The stakeholders included Kenya’s President William Ruto, African Development Bank (AfDB) President, Akinwumi Adesina, Moussa Mahamat, Chairman African Union Commission, and Patrick Verkooijen, Chief Executive Officer, The Rotterdam-based Global Center on Adaptation.

They said: “Of the 52 low- and middle – income countries that have defaulted on their debts or have come close to it in the last three years, 23 are in Africa.

“The continent’s debt burden is skyrocketing as a result of factors beyond its control.

“The aftershocks of the pandemic, rising fuel and food

prices, higher interest rates and climate catastrophes that weaken our economies and sap our ability to repay creditors.

“ As a result of rising interest rates, Africa’s debt repayments will surge to 62 billion dollars this year, up 35 per cent from 2022.”

According to the stakeholders, Africa is now paying more in debt servicing than the estimated 50 billion dollars a year the Global Center on Adaptation says it needs to invest in climate resilience.

They said rather than addressing climate crises, Africa was borrowing at a cost up to eight times higher than the rich world to rebuild after climate catastrophes.

The stakeholders said this was why Africa urgently needs a pause in debt repayments, so that it could prepare for a world of ever greater climate extremes.

They expressed the hope that the on-going Annual Meetings of the International Monetary Fund (IMF), and the World Bank in Marrakesh, Morocco would help address some challenges faced by the continent.

“ In fairness, the World Bank and the IMF now recognise that climate change is a threat to economic and financial stability, and they are changing their lending policies in response.

“But much more needs to be done and we are running out of time to do so,” they said.

According to them, this week’s meeting in Marrakesh is an opportunity to start transforming proposals into actions.

They said: “Africa called for a 10-year moratorium on interest payments on foreign debt to give the world’s most vulnerable countries the space to invest.

“In climate resilience and other pressing needs, such as health and education. And we need a more imaginative use for debt relief.

“We need a speedier process that will quickly provide effective relief for the 52 countries that have defaulted or are at risk of it.

“We are not pretending this will be easy, creditors must all agree, and there are thousands of them.”

The stakeholders reiterated Africa’s commitment to adapt to the consequences of climate change that are not of its making.

“But it cannot adapt alone. The financing gap is enormous and so are the continent’s needs.

“Africa wants to work with the rest of the world to achieve solutions. With its young population, vast renewable energy and mineral resources and large tracts of uncultivated arable land.

“The continent is more important to future global prosperity than ever before.

“Making global finance responsive to Africa’s climate needs is one of the ways to ensure that Africa succeeds, bringing benefits to the whole world,” they said.

The stakeholders quoted António Guterres, UN Secretary-General, as calling on the IMF to use the international reserve asset to support Africa’s course.

“IMF should rechanneled 100 billion dollars a year in special drawing rights, an international reserve asset, to pay for investments in sustainable development and climate action on the continent,” they said.(NAN)

Edited by Joseph Edeh

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