UN Secretary-General Antonio Guterres has expressed serious concerns about the potential for significant social unrest in African countries due to inadequate debt relief and limited resources. He has called for urgent reforms to the international financial system to tackle these issues effectively.
The continent is facing an increasingly severe debt crisis, which has already triggered widespread protests. For instance, recent unrest in Kenya, sparked by clashes over proposed tax hikes, has inspired similar demonstrations in Nigeria and Uganda, where the focus has been on the rising cost of living.
African nations have been attempting to resolve their debt issues through the G20’s ‘Common Framework,’ but this initiative has yet to substantially expedite negotiations with key stakeholders, including Chinese state-owned banks, London-based asset managers, and New York financial institutions.
Zambia is notable for having successfully restructured its debt in June under this framework, more than three years after defaulting on its obligations.
At a recent China-Africa cooperation summit in Beijing, Guterres reiterated that Africa’s current debt situation is “unsustainable” and could lead to further social unrest. He highlighted the urgent need for effective debt relief mechanisms, more resources, and increased concessional funding to meet basic needs.
Guterres proposed substantial reforms to the outdated and ineffective international financial architecture and called for additional financial support to provide developing countries with the liquidity required to address immediate needs while working on long-term solutions.
At the same summit, China, the world’s largest bilateral lender, pledged 360 billion yuan ($50.70 billion) in new financing for Africa over the next three years. This commitment follows a $4.61 billion increase in loans to Africa last year, marking the first annual rise in Chinese loans to the continent since 2016.