Religious leaders call for solutions to Africa's Sh157 trillion debt crisis
African faith leaders from 11 countries have expressed concern over the continent's Sh157 trillion debt crisis, with 25 countries said to be in “deep debt”. The leader say the countries should strive to reduce the debt burden to achieve sustainable development. They further said the continent is also suffering from challenges such as the HIV and Aids pandemic, insecurity, climate change, water scarcity, fragile health systems and biodiversity loss. The Sh18.6 trillion debt relief has not been sufficient to address the continent's financial and governance challenges, leaving the continent with the burden of unsustainable debt, the leaders added. “Today, African countries owe collectively more than $1.1 trillion (Sh157 trillion) in external debt, and 25 of them are in a deep debt crisis. Debt financing and the inordinate interest rates incurred by the global south in servicing debt affects social sector spending to achieve development and climate goals,” said the religious leaders in a statement read by Bishop John Oballa from the Catholic Diocese of Ngong’. The religious leaders were drawn from Kenya (a 10-member delegation led by Bishop Oballa), Burkina Faso (Bishop Laurent Dabire), Côte d'Ivoire (Fr Arsene Brice Bado), Ghana (Rev Prof Eugenia Amporfo), Liberia (Rev Macdonald Nah and Rev Melvin Kennedy), Malawi (Archbishop Thomas Msusa) and Mali (Florence Kone and Bishop Jonas Dembele). Other countries represented were Nigeria (Dr Uchechukwu Obodoechina), South Africa (Fr Peter John Pearson), Uganda (Rt Rev Serverus Jjumba) and Zambia (Rev Canon Emmanuel Chikoya). The religious leaders said these challenges have exacerbated poverty levels on the continent, inequality and governance challenges. In a bid to promote Africa's development, they have called for a debt reduction process that could include reducing or refinancing debt to make it easier for borrowing countries to repay; spreading payments over longer periods; or reducing the interest rate on loans. They have also called on major lenders to “enact laws that require them to participate in debt relief.” This includes legislation such as the New York Taxpayer and International Debt Crises Protection Act in the United States, which provides for debt relief for developing countries. “In a world where shocks are becoming the norm, debt contracts should embody a fairer understanding of how to share risks between creditor and debtor. Going forward, to prevent new cycles of debt, faith leaders call on countries to put in place laws, regulations and practices that enforce responsible lending and borrowing, and ensure departures from them have consequences for the public and private actors involved,” the statement says. “In addition to debt relief solutions, African countries will need scaled-up access to concessional and low-cost, long-term finance. African governments also need to eradicate theft of public funds and corruption of all types and to ensure public finances address the needs of its citizens. Increased money transfers should go hand in hand with improved policies and practices for their use. They have a responsibility to secure inclusive and participatory processes at the borrower level to decide on lending priorities and monitor that funds are used for their intended purposes,” he added. African governments could also lighten their debt burden by encouraging the international community to increase their financial capacities, which would allow them to prioritise initiatives that reduce poverty in the African nations, the religious leaders added. “Multilateral development banks are the institutions most capable of deploying such a type of funding, but cannot currently keep up with demand. We welcome the international community's current exploration of ways to increase their financing capacity and support combining new ways to use capital and capital increases in order to reach the desired scale,” the statement says. A report by Debt Justice released in 2022 showed that many African countries owe three times more debts to the West than to Chinese lenders. It also explains that Africa is charged double interest by Western firms, compared to Chinese firms. According to the International Monetary Fund (IMF) and the World Bank, 22 low income African countries were, as of November 2022, experiencing difficulties in servicing their external debt. Because of debt, Africa struggles with other pressing issues such as poverty, climate change and gender equality. [email protected]