Strategic Objective 2: Contribute to the establishment of a fair and transparent international sovereign debt restructuring mechanism
The absence of a satisfactory international framework to restructure the unsustainable debts of low–income countries especially many in Sub-Sahara Africa is worrying at a time many of these countries are registering a rise in new government borrowing. There have been a total of 317 sovereign debt restructurings in Africa since the early 1980s far more than on any other continent or regions yet African perspectives have so far not featured prominently in the ongoing sovereign debt debates globally.With this in mind, AFRODAD believes that an internationally sanctioned arbitration mechanism offers an alternative approach that addresses or eliminates the power imbalance between Governments and Creditors. Currently there is no platform/mechanism in the world that has jurisdiction over cases of debt disputes between sovereign states and private lenders, except Civil Courts and national jurisdictions.
It was a historic occasion when the UN General Assembly voted on 9th of September 2014, in favour of the resolution “Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes” (A/68/L.57/Rev.2). AFRODAD together with key global civil society networks are convinced that the UN General Assembly process to create a multilateral legal framework is a historic chance for developing countries to change “the rules of the game”.
The UN General Assembly adopted a "non-binding" set of principles of a voluntary nature (sovereign’s right to restructure, equitable Treatment, sovereign immunity, majority restructurings). There is still a long way to go in terms of reaching an international legal framework, given the political dynamics in the UN. However this is a major outcome and one in the right direction. AFRODAD will continue to monitor and participate in all UN and other global processes leading to the creation of a binding legal framework for debt restructuring.