Global Finance Reform

To better address the recurrent sovereign debt crisis many developing countries are facing, the proposals contained in the FfD4 Zero Draft need to be strengthened. This is because proposals to address the debt crisis must recognize that is not an aberration but rather an integral feature of the global financial and debt architecture. The Zero Draft needs to abandon the assumption that the primary reason for this indebtedness is that developing countries have overborrowed. Instead, the proposals in the Zero Draft need to take into account that the debt crisis is symptomatic of deeper structural features and weaknesses both of the global financial and debt architecture as well as of the economies of these indebted countries.

The Elements Paper and the Zero Draft present an opportunity for meaningful debt governance reforms, yet their reaffirmation of the IMF’s central role perpetuates the marginalisation of Africa in financial decision-making. This blog has made calls for a transformative approach that decouples debt governance from the Bretton Woods institutions and centres it within the United Nations. A truly inclusive and equitable debt architecture requires decentering the IMF, establishing an independent Global Debt Authority hosted within the UN, and reforming debt sustainability assessments to reflect the needs and priorities of Africa. Without these changes, African debt-dependent economies will continue to face unjust financial constraints, limiting their capacity to achieve sustainable development goals.

June 30, 2023

Excerpts from the Introduction by James Thuo Gathii

The African Sovereign Debt Justice Network, (AfSDJN), is a coalition of citizens, scholars, civil society actors and church groups committed to exposing the adverse impact of unsustainable levels of African sovereign debt on the lives of ordinary citizens. Convened by Afronomicslaw.org with the support of Open Society for Southern Africa, (OSISA), the AfSDJN's activities are tailored around addressing the threats that sovereign debt poses for economic development, social cohesion and human rights in Africa. It advocates for debt cancellation, rescheduling and restructuring as well as increasing the accountability and responsibility of lenders and African governments about how sovereign debt is procured, spent and repaid.