Navigating Debt Crises: View From The 14th Unctad Debt Management Conference

Navigating Debt Crises: View From The 14th Unctad Debt Management Conference

Overview

The 14th UNCTAD Debt Management Conference, held from the 17th to 19th of March 2025 at the Palais des Nations, Geneva – Switzerland under the theme “Innovative and Resilient Debt Management: Managing Risks and Navigating Crises.” The conference is a biennial forum for sharing experiences and exchanging views among governments, international organizations, academia and civil society on current issues in the global debt landscape in developing. This year’s conference brought together senior-level national debt managers from around the world and provided a moment for examining the escalating debt challenges facing developing nations, particularly in Africa, amid multiple shocks and a poly crisis that has tightened the fiscal space for African countries and push them down the path of unsustainable debt burdens. As an observer, the proceedings revealed a complex landscape of differing opinions and a pressing need for innovative solutions.

1. Debt crisis broadly acknowledged amid conflicting view on existing solutions

The conference broadly acknowledged the current debt crisis and the vulnerability of countries to this problem even those that are seemingly on the right track in terms of sound debt management policies. This has been largely due to existing limitations of the global financial architecture - a recurring view in the conference deliberations. The need for formulating tools and crafting policies that are abreast of providing adequate solutions and dealing with current realities cut across the board in the various sessions. These were, however, based on conflicting views on the adequacy of existing mechanisms like the DSSI, Common Framework, and the Global Sovereign Debt Roundtable which require reforms compared to the view that these tools and frameworks have failed to deliver within expectation and the need to craft more ambitious frameworks that are up to date with current challenges in view of reforming the global financial architecture. 

2. Tension between mainstream and progressive views

The exchanges highlighted the tension between mainstream and more progressive approaches to the current debt crisis. They respectively recommend between preserving and strengthening the current arrangements with the IMF and the World Bank and reforming at the forefront, compared to being more ambitious as per CSO demands for the Fourth Financing for Development (FFD) Conference which recommends a UN Framework Convention on Sovereign Debt and the establishment of a Global Debt Authority at the United Nations. The conference, announced by Rebecca Greenspan, Secretary General for UNCTAD as providing a way to reflect on the path to FFD, but the divergent views struggled to maintain a focus on this critical area. Discussions often veered away from consensus-building, revealing divergent views on strengthening multilateralism. The EU's perspective, emphasising the G20 Common Framework and technical assistance to help countries strengthen their debt management in sharp contrast to CSO demands for more radical solutions through FFD. While reforming the GFA was widely agreed upon, the path forward remained contentious. The role of the IMF and World Bank was a central point of discussion, with some arguing that additional UN structures would merely duplicate functions. This reflects a broader struggle between reforming existing arrangements versus more disruptive approaches, such as those pushed by Civil Society through the FFD.

3. Emerging issues and positions

 Proposed innovative solutions, such as staying debt service in the event of disasters and debt-to-climate swaps, gained significant favour among many discussants – as contentious as they are in the broader CSO community. The idea of a Borrowers Club/Platform for knowledge sharing also emerged – to promote coordination among borrowers. However, the idea of general debt relief like HIPC/MDRI was quickly dismissed – citing the obvious positions of major economies like the USA and China. Disappointingly, South Africa cited debt as an overarching issue for its G20 Presidency, supports a debt jubilee movement, cubing IFFs and leveraging critical minerals but shows no strong leadership that aligns with African CSO demands for the FFD process and for solutions in the scale of HIPC/MDRI when pushed by Chad in the plenary. The conference revealed strong support for private sector solutions, particularly debt swaps, while alternative and ambitious shifts from the current development financing arrangements were largely sidelined. The idea of reparative justice was notably absent. Overall, the proceedings reflected a Northern agenda, with UNCTAD seemingly powerless to challenge the positions of OECD and Paris Club countries.

4. Key Takeaways for AFRODAD

Advocate for alternative solutions: The conference highlighted the need for AFRODAD to continue advocating for more alternative arrangements to the debt crisis – specially the reforming the Global Financial Architecture, putting in place the UN Framework Convention on Sovereign Debt and the establishment of a Global Debt Authority - challenging the dominance of mainstream approaches

The 14th UNCTAD Debt Management Conference served as a stark reminder of the challenges ahead. While discussions were valuable, the lack of radical solutions and the dominance of Northern agendas raise concerns. AFRODAD must play a crucial role in advocating for a more equitable and sustainable debt management system that prioritises the needs of African nations. This includes urging African governments, the African Union and other fellow CSO to support the calls on FFD process towards establishing an intergovernmental authority at the UN regardless the resistance against this call – through the UN Framework Convention on Sovereign Debt and the Global Debt Authority.

African governments should work to strengthen debt management. They should Invest in building robust debt management systems, establishing mechanisms for public oversight and accountability in debt management, strengthening transparency in all borrowing activities, including disclosing loan terms, debt levels, and debt utilization in line with the recommendations of the African Borrowing Charter. 

The Regional Economic Communities (RECs) in African should work to harmonise debt management policies - that promote coordination, information sharing, and best practices among member states as already being done in SADC countries through the SADC Model Law on Public Finance Management. AFRODAD urge SADC countries to move towards the domestication of the model law and for other Regional Economic Communities to focus on the development of such model laws as a way to promote regional convergence in debt management policies.

We urge the African Union and African Institutions such as UN Economic Commission for Africa and the African Development Bank to strongly support and champion the putting in place of a UN Framework Convention on Sovereign Debt to create a more equitable and transparent system for managing sovereign debt. To work with African Civil Society towards actuallising the calls for a reforming a global financial architecture to make it just and inclusive of the voices and interest of African countries and its global south counterparts. We urge them to expedite the development of African financial institutions to provide financial and technical support to member states facing debt crises.

We urge African Civil Society Organizations to continue to monitor government borrowing and debt management practices to ensure transparency and accountability raise public awareness about debt issues and their impact on development, advocate for policy changes that promote responsible borrowing, debt sustainability, and equitable debt management, engage with governments and other stakeholders to promote dialogue and collaboration on debt management issues and to collaborate with regional and international networks to share information, coordinate advocacy efforts, and amplify CSO voices on debt issues.

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