African Leaders Urge Global Financial System Reform to Address Debt, Climate Risks

NAIROBI, Xinhua: African leaders on Wednesday renewed calls for reforms to the global financial architecture, emphasizing the need for it to be more responsive to the continent’s destabilizing debt and climate vulnerabilities.

Meeting in Nairobi, Kenya, the leaders said there is a need for changes as African countries are struggling with high financing interest rates, climate shocks and constrained government revenues.

“A better, more responsive and fairer international development financial architecture is urgently needed. Time is of the essence,” said Kenyan President William Ruto during the official opening of the 59th Annual Meetings of the African Development Bank (AfDB) Group.

The five-day meeting, which brought together heads of state of regional countries, senior officials and experts, included high-level plenary sessions and thematic knowledge events to address Africa’s challenges and opportunities.

Ruto said that African economies continue to bear the burden of rising costs of servicing huge national debts, partly caused by high global interest rates and external shocks. He added that while Africa needs to raise resources to invest in infrastructure and industrialization for rapid economic growth, it faces the rigid barrier of a global financial architecture that is fundamentally misaligned with the continent’s aspirations.

Rwandan President Paul Kagame emphasized the need for a new global financial architecture that addresses the continent’s interests, saying that through continental unity, Africa can lower the cost of funds flowing into the region.

Zimbabwean President Emmerson Mnangagwa said that Africa typically borrows from international markets at rates far above those paid by the rest of the world, and the debt problems faced by many African countries, which consume the largest share of national resources and hinder the development agenda, are a result of an unjust financial architecture.

Somali President Hassan Sheikh Mohamud stressed that reforms to the global financial architecture should incorporate the continent’s most challenging development issues, including debt sustainability and climate vulnerabilities, to enable the achievement of the Sustainable Development Goals and Africa’s Union Agenda 2063 commitments.

Akinwumi Adesina, president of the AfDB, also called for reforms in the global financial architecture to better cater to Africa’s development needs, noting that the African lender is already undertaking similar reforms.

Adesina said the AfDB is progressing toward its goal of mobilizing 25 billion U.S. dollars for climate financing. “Last year, we devoted 45 percent of our total lending to climate financing,” he said.