African faith leaders have raised concern African countries currently owe collectively more than 1.1 trillion US dollars in external debt with 25 of them in deep debt crises.
According to the clergymen, debt financing and the high interest rates incurred by southern countries in servicing debt make it difficult for their governments to provide social services like health, education and social protection and in environmental protection.
“This makes it difficult for the entire world to achieve the global sustainable development and climate goals. Rising interest rates in major economies and slowing growth inflate debt payments, while cost-of-living trends erode wages and incomes,” the faith leaders said in a joint statement.
“We note with concern that the stakes of this debt crisis are much higher than before the last Jubilee year, though. We need large investments to save the planet that sustains life in Africa and elsewhere, during a window that is rapidly closing,” they added.
The faith leaders who held a consultative in Nairobi said that these crises are a result of governance and social justices’ issues at the international and domestic level linked to: tax injustice in globalization, trade imbalance between donor and recipient countries and gaps in management of public finance at the domestic level.
This in turn, they said, has intensified poverty, inequality, and governance challenges in the continent and set back progress on attainment of sustainable development goals.
Bishop Laurent Dabire from Burkina Faso noted without addressing the inequities in the international financial system and domestic governance challenges in recipient countries, the crippling burden of unsustainable debts persists.
The faith leaders have proposed the urgent establishment of a debt reduction process that allows borrowers to quickly reduce debt payments to protect crucial development and climate investments.
Noting that over 45 per cent of Africa’s debt is held by private creditors, financial centers governing these contracts must pass laws ensuring these creditors participate in debt relief.
Sam Zan Akologo, campaign manager, CARITAS Africa, called on African countries to adopt laws and practices that advocate responsible lending and borrowing as per the United Nations Conference on Trade and Development (UNCTAD) principles.
