The Angolan President, João Lourenço, current chair of the African Union, on Monday called for fairer debt restructuring mechanisms and innovative financing instruments to support Africa’s development.
Lourenço’s remarks, addressed to African and European Union leaders gathered in the Angolan capital, come at a time when a growing number of African countries are at risk of debt distress, Reuters reported.
The G20’s Common Framework, created during the COVID-19 pandemic to accelerate debt restructuring for poorer nations, has seen limited progress, although last weekend’s G20 summit in South Africa committed to improving it.
“We are in urgent need of a new vision for the financial relationship between Africa and international lending institutions so that we can invest in development without being stifled by unsustainable debt,” Lourenço said on the first day of the AU–EU summit.
“On behalf of all of Africa, I reiterate the urgency of working towards a comprehensive reform of the global financial system, including fairer debt restructuring mechanisms,” he added.
United Nations Secretary-General António Guterres, who also spoke at the summit, agreed that the world’s financial architecture needs reform.
“We must reform it for the benefit of all, which means ending the crushing debt cycle (…) and giving developing countries, many of them in Africa, greater participation and influence in global financial institutions,” Guterres said.
A panel of African experts established by South Africa during its G20 presidency this year recommended a new debt refinancing plan for low-income countries burdened by high repayments, rather than the current focus on merely rescheduling payments.
The G20 Common Framework saw early test cases, such as Ghana and Zambia, take years to make progress.
Debt concerns for countries such as Senegal and Mozambique have once again put debt resolution mechanisms at the centre of the debate.
