African Reserves

African religious leaders call for cancellation of punitive foreign debts

NAIROBI, Kenya – Catholic leaders in Africa have called for the removal of unpaid debts, saying the burdens are driving their countries deeper into poverty.

They said the continent was grappling with an unprecedented confluence of crises and urged international leaders to prioritize actions that enable Africa’s recovery.

The religious leaders wrote an open letter to the Group of 7 and African finance ministers, who were due to meet at the October 10-16 meetings of the International Monetary Fund and the World Bank in Washington.

“The first priority is to eliminate the crushing burden of unpaid debts, a call that we constantly find in the voices of leaders of various religious traditions, certainly those of the Catholic Church,” reads the statement signed by Archbishop Gabriel Justice. Yaw Anokye from Kumasi. , Ghana, President of Caritas Africa, the African confederation of Catholic charities participating in the Caritas Internationalis network.

In the October 5 statement, the leaders highlighted the impact of the COVID-19 pandemic, saying it had caused an economic contraction of more than 3% and reversed years of development progress on the continent. The letter says that since the start of the pandemic in 2020, more than 40 million people have fallen into extreme poverty, after two decades of poverty reduction.

He said recession is looming again, just three years after the biggest global recession in a century. The letter also mentioned other threats that could derail Africa’s fragile recovery: the impact of the Russian-Ukrainian war, the highest food and fuel inflation in decades, worsening drought in the Horn Africa and rising interest rates in major economies.

“Their effects have already led to the fastest increases in hunger on our continent, where food crises already affect 346 million people,” the letter said.

While calling for policies outlining how to get out of the debt crisis, the letter also called for a review of lending and borrowing rules and standards.

“Borrowers must not continue to bear the brunt of external shocks alone, which are increasingly frequent and put their poorest at risk,” said the statement, which called for the redistribution of funds into drawing rights. Special Funds, an international reserve asset created to supplement the official reserves of its member countries.

“We believe that SDRs have a much greater role to play in supporting health, education, food and social investment, climate adaptation and the achievement of the Sustainable Development Goals,” the statement said.

At the same time, he said poor countries need to improve national governance and accountability. He called on African Heads of State to improve governance by promoting transparency, inclusiveness and accountability for public and natural resources.

Meanwhile, in a speech ahead of the IMF and World Bank annual meetings, IMF Managing Director Kristalina Georgieva said the global economy is fragile and she predicted a global loss of $4 trillion up to ‘in 2026.

Georgieva said growing debt vulnerabilities increase the risk of a deepening debt crisis that will hurt people and global growth. She urged faster implementation of a Group of 20 debt relief process known as the Common Framework for Debt Treatment Beyond the Service Suspension Initiative. debt.