AFRODAD Coordinates with other Civil Society Organisations to Call for Debt Justice in a Collective statement to the African Union

AFRODAD took a lead in drafting the debt justice section of the statement from members of the African Movement Building Space to the African Union, titled “We demand”: A Collective Statement to African Union. The main ask from the movement is systemic change that would result in the creation of sustainable societies. Besides debt justice, other demands in the statement include tax justice, leveraging Africa’s strategic minerals, food sovereignty, gender justice and inclusion, swift and just energy transition, among others.

The statement contains 5 key demands for debt justice:

1. Africa needs a strong, dependable, and friendly financial institution that will help it access capital to finance its Agenda 2063. The establishment of the AU Financial Institutions (AUFIs) is overdue even after the adoption of the legal instruments for the establishment of the African Investment Bank (AIB) and the African Monetary Fund (AMF) in 2009 and 2014 respectively.
2. We call on AU member states to help in formulating a strategy to generate the much-needed consensus and enhanced political will on key issues and galvanise the momentum towards the establishment of the AUFIs. The establishment of these institutions will give Africa a stronger voice in international financial organisations, allowing it to better shape global economic policies.
3. Over the years, African countries have been put under pressure to review and renegotiate their foreign debts to avoid default from the Bretton-Woods institutions and commercial lenders. Today, at least 23 low-income countries in Africa are facing a debt crisis as they are expected to pay more than $68.9 billion in external debt service. We, therefore, ask the AU to put extra pressure on lenders to avoid exerting financial vulnerability syndrome on African states.
4. In addition, we call for a comprehensive and systematic response to the incipient debt crisis outside the default framework to create fiscal space for the financial development of Agenda 2063. Transparency and accountability in debt registries across the region should be encouraged, which is fundamental in in-depth debt statistics compilation. We therefore ask the AU to champion the inception of the Africa Debt Monitoring Mechanism (ADMM) which has the potential to contribute to enhancing publicly available debt data in Africa thereby enhancing the momentum around establishing debt registries in African countries.
5. We call for a coordinated approach pegged on a unified strategy when it comes to debt management in Africa. African economies, through the guidance of the AU, should adopt new strategies in engaging both the commercial and private creditors in debt restructuring and monitoring including value recovery instruments, cash equivalents, credit enhancement, and loss reinstatements, among others. However, these tools should match the Africa Central Bank’s capacity to adapt and implement the macro-prudential rules while retaining their independence from the influence of the lenders. We therefore call for the AU to coordinate with its member countries in having a collective bargaining approach to Africa’s debt restructuring or relief processes including the G-20 common framework.