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October 7, 2022By Fredrick Nzwili, Catholic News Service
NAIROBI, Kenya (CNS) -- Catholic leaders in Africa have called for the removal of the unpayable debts, saying that the burdens were sinking their countries further into poverty.
They said the continent was struggling with an unprecedented confluence of crises and urged international leaders to prioritize actions that enable Africa's recovery.
The faith leaders wrote an open letter to the Group of 7 and African finance ministers, who were to meet during the Oct. 10-16 meetings of the International Monetary Fund and World Bank in Washington.
"The first priority is to remove the crushing burdens of unpayable debts, a call that we find consistently in the voice of leaders of diverse religious traditions, certainly those of the Catholic Church," said the statement signed by Archbishop Gabriel Justice Yaw Anokye of Kumasi, Ghana, president of Caritas Africa, the African confederation of Catholic charitable agencies that participate in the Caritas Internationalis network.
In the Oct. 5 statement, the leaders highlighted the impact of the COVID-19 pandemic, saying it led to an economic contraction of more than 3% and reversed years of development progress on the continent. The letter said since the pandemic began in 2020, more than 40 million have fallen into extreme poverty, after two decades of poverty reduction.
It said recession looms again, barely three years after the biggest global recession in a century. The letter also mentioned other threats that could derail Africa's fragile recovery: the impact of the Russia-Ukraine war, the highest food and energy inflation in several decades, the worsening Horn of Africa drought and interest rate hikes in major economies.
"Their effects already led to the fastest rises in hunger in our continent, where food crises already affect 346 million people," the letter said.
While calling for policies that outline how to get out of the debt crises, the letter also called for a review of lending and borrowing rules and standards.
"Borrowers should not continue to shoulder alone the weight of external shocks, which are increasingly frequent and put their poorest at risk," said the statement, which called for redistribution of funds in the IMF's Special Drawing Rights, an international reserve asset created to supplement the official reserves of its member countries.
"We believe SDRs have much more significant role to play in supporting health, education, food and social investment, climate adaptation and the achievement of the Sustainable Development Goals," the statement said.
At the same time, it said poor countries must improve domestic governance and accountability. It called on African heads of state to improve governance by promoting transparency, inclusion and accountability for public and natural resources.
Meanwhile, in a speech ahead of the IMF and World Bank Annual Meetings, Kristalina Georgieva, IMF managing director, said the global economy is fragile, and she predicted a $4 trillion global loss through 2026.
Georgieva said the growing debt vulnerabilities increase the risk of a widening debt crisis that would harm populations and global growth. She urged a quicker implementation of a Group of 20 debt relief process known as the Common Framework for Debt Treatments Beyond the Debt Service Suspension Initiative.