The United Nations Secretary General on Saturday called for a review of the global financial system to allow developing countries debt relief and investment capacity to overcome cyclical crises.
“We need a new debt architecture that provides debt relief and debt restructuring to vulnerable countries, including middle-income countries, while providing immediate debt relief and payments to countries in need,” he said. António Guterres, in the opening speech of the 36th Summit of Heads of State and Government of the African Union, in Addis Ababa. .
Subsequently, “the Multilateral Development Banks must transform their business model and accept a new risk approach” to “massively leverage their funds to attract greater flows of private capital to their countries,” he said.
“I called for a new Bretton Woods moment to radically transform the global financial architecture,” which should focus “on the needs of developing countries,” which “should have a much bigger voice in global institutions, including financial institutions.” .
“The 21st century is about to be the century of Africa”, considered the UN Secretary General, who praised the work of the AU, through “inspiring measures to help materialize the enormous potential of this great continent”, with the approval of Agenda 2063, “The Decade of the Financial and Economic Inclusion of Women”.
António Guterres also highlighted the focus “on job creation and the enormous potential of the African Continental Free Trade Area (AfCFTA)”, despite the adverse context.
“I also recognize the enormous tests facing Africa, and indeed our world, on virtually all fronts,” Guterres said, stressing that the world’s problems have consequences on the continent.
“In many ways, the people of Africa are bearing the brunt of these crises,” with a “dysfunctional and unfair global financial system failing developing countries when they need it most,” said the UN Secretary-General, who also lamented the “profound inequalities in the availability of resources for recovery from the pandemic” and the “cost of living crisis, exacerbated by the consequences of the Russian invasion of Ukraine.”
“Investing in Africa’s paths to prosperity requires financing” and “developing countries are repeatedly left to fend for themselves” because “the global financial system routinely denies them debt relief and concessional financing while charging interest rates exorbitant,” he said.
The consequence is simple: “Vital systems are deprived of investment, from health and education to green technology, social protection and the creation of new sustainable jobs,” he said.
African countries cannot invest in these critical areas and climb the development ladder with one hand tied behind their back.
As for “climate chaos, which the people of Africa have done little to cause,” Guterres warns that there are “deadly floods and droughts, putting communities and lives at risk and displacing millions of people.”
“In September, I will convene a Climate Ambition Summit on our way to COP28 in December, where governments, business and civil society will demonstrate their commitment to achieving net zero emissions.”
Source: TSF
