The United Nations Secretary-General this Saturday called for an overhaul of the global financial system to enable developing countries to relieve debt and provide 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 repayments to countries in need,” said António Guterres in the opening address of the 36th Summit of Heads of State and Government of the African Union , in Addis Ababa. .
After that, “multilateral development banks need to transform their business model and adopt a new approach to risk,” to “massively leverage their funds to attract greater flows of private capital to their countries,” he claimed.
“I called for another Bretton Woods moment to radically transform the global financial architecture” which should be focused “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 become the century of Africa,” said the UN Secretary-General, who praised the work of the AU through “inspiring action to help realize the enormous potential of this great continent “, with the adoption of the Agenda 2063, “the decade of women’s financial and economic inclusion”.
António Guterres also stressed the focus “on job creation and the huge potential of the African Continental Free Trade Area (AfCFTA)”, despite the adverse context.
“I also recognize the tremendous trials Africa — and even our world — is facing on virtually every front,” Guterres said, emphasizing that the world’s challenges are having an impact on the continent.
“In many ways, the peoples of Africa bear the brunt of these crises,” with a “dysfunctional and unfair global financial system failing in developing countries when they need it most,” said the UN Secretary-General, who he also lamented the “profound disparities in the availability of resources for the recovery from the pandemic” and the “crisis of the cost of living exacerbated by the consequences of the Russian invasion of Ukraine”.
“Investing in Africa’s pathways to prosperity requires financing” and “developing countries are repeatedly left behind” because the “global financial system routinely denies them debt relief and concessional financing while charging exorbitant interest rates,” he opined.
The result is simple: “Vital systems are deprived of investment – from health and education to green technology, to social protection and the creation of new sustainable jobs,” he stressed.
African countries cannot invest in these critical areas and climb the development ladder with one hand tied behind their backs.
As for “climate chaos, which the people of Africa have done little about,” Guterres warns that there are “deadly floods and droughts, endangering communities and lives and displacing millions of people.”
“In September, I will convene a climate ambition summit on the way to COP28 in December, where governments, business and civil society will demonstrate their commitment to achieving net zero” emissions.
Source: DN
