As global leaders gear up for significant assemblies in September, including the Africa Climate Summit, the G20 New Delhi Summit, and the 78th session of the U.N. General Assembly, Catholic bishops and faith leaders in Africa are echoing a resounding plea for debt relief for the continent. The goal is to provide Africa with a "lifeline" that could enable it to break free from the numerous crises afflicting its populace.
In the midst of growing discontent linked to escalating food and living costs, coupled with mounting inflation across Africa, economic burdens have emerged as a formidable barrier to development, exacerbating poverty and sparking conflicts and protests in several countries, according to these religious leaders.
The remedy that these leaders emphasize for addressing the pressing needs of African nations is rooted in tackling the issue of debt, specifically through its reduction. The external debt of the African continent presently amounts to a staggering $1.1 trillion, with 25 countries grappling with severe debt crises. "External debt" signifies the portion of a country's debt that has been procured from foreign lenders, including governments, commercial banks, or international financial institutions.
African countries have been resorting to borrowing as a means to finance their national budgets (referred to as debt financing), yet the process of repayment has entailed exorbitant interest rates. This, in turn, has thwarted their endeavors to realize global sustainable development goals and climate objectives, as underscored by these faith leaders. They are optimistic that a reduction in debt could offer much-needed relief, significantly benefiting millions of ordinary citizens.
Bishop John Obala Owaa of Ngong, representing Christians, Muslims, and members of African traditional religions, stated, "We reassert that... the unified voice of African faith leaders emerges with unwavering clarity and determination." He delivered this proclamation on August 8th while presenting the leaders' statement, a document that elucidated a path for Africa to emerge stronger from its ongoing crises.
"Our respective Holy Scriptures emphasize the pursuit of justice, guiding us in our actions and decisions," the bishop declared during the Nairobi meeting, which saw participation from various interfaith leaders. The event, hosted by Caritas Africa, the Jesuit Justice and Ecology Network, and the Jubilee USA Network, took place from August 6th to 9th at the Elysian Resort in Nairobi. It served as a platform for discussing sustainable development and support for Africa's recovery.
In light of the fact that numerous African countries are presently emerging from the dire consequences of the COVID-19 pandemic, the leaders underscored the disruptions that their food systems have encountered due to climate change-induced droughts, armed conflicts, and more recently, the Ukrainian war, which has disrupted food import supply chains.
The faith leaders stressed the necessity of passing laws that would ensure private creditors, who hold over 45% of Africa's debt, are included in debt relief efforts. According to these leaders, financial centers overseeing these contracts must enact regulations mandating the participation of these creditors in debt relief.
Looking back to the 1990s, the faith leaders reminded us of their involvement in the Jubilee Movement, which aimed to alleviate the "chains of debt" in developing countries. However, they expressed concern that over three decades later, the debt crisis has only intensified.
The leaders recounted a significant achievement in 2005 when the Jubilee 2000 movement successfully advocated for debt cancellation in impoverished nations. This effort led to a debt cancellation agreement among the Group of 7 (G7) finance ministers in London, resulting in the cancellation of $130 billion of debt for 36 countries. The G7 countries consist of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, with the European Union as a "non-enumerated member."
Despite the jubilation surrounding this accomplishment and the subsequent reduction in poverty across African countries, the faith leaders noted that the persistence of unsustainable debts continues to undermine progress. The structural challenges inherent in international and domestic financial systems have yet to be effectively addressed.
"As we approach a new Jubilee year in 2025, that promise remains unfulfilled," Bishop Owaa lamented, emphasizing that the stakes in this debt crisis are even higher as time rapidly runs out.
Analysts pointed out that the economic disruption caused by the COVID-19 pandemic in 2020 led to reduced economic activities and increased government spending. This, in turn, slowed down investments in critical areas like education, health, and infrastructure, while exacerbating the debt burden.
Father Charles Chilufya, director of the Justice and Ecology Office at the Jesuit Conference of Africa and Madagascar, proposed that supporting African countries involves providing debt relief, grants, and concessional loans. This would alleviate the debt burden, allowing African nations to channel resources towards healthcare, education, and infrastructure development. He also highlighted that addressing the root causes of the debt crisis, including unfair global financial structures, corruption, and weak governance, is crucial to prevent a recurrence of the crisis.
The faith leaders, however, cautioned against the corruption within African governments that results in the misallocation of funds, further worsening the debt crisis. They urged countries to implement laws and practices that promote responsible lending and borrowing to prevent recurring cycles of debt.
As key international meetings in September and the World Bank and IMF annual meetings in Morocco draw near, these leaders are gearing up to appeal to heads of states and finance ministers for actions to aid Africa in tackling its multiple crises. They are also calling on African governments to address corruption and misappropriation of public funds, ensuring that public finances are directed towards addressing citizens' needs.
