Huge external debt hurting African countries – African faith leaders

African countries collectively owe more than 1.1 trillion dollars in external debt, an African clergy lobby group has said.

The lobby christened African Faith Leaders said the huge external debt was hurting African countries hence the need to reduce it for the continent’s best interest. They said 25 of the 54 countries were in deep debt crisis.

“Debt financing and the ordinate interest rates incurred by the global South in servicing debt affects social sector spending to achieve the global sustainable development and climate goals,” the clergy said.

They addressed the press at a Nairobi hotel on Tuesday.

The statement signed by 26 men and women of the cloth titled ‘African Faith Leaders on how Africa can emerge better from today’s multiple crisis’ was read by Kenyan Bishop John Oballa of the Catholic Diocese of Ngong.

The over 26 faith leaders were from Kenya, Cote D’ivoire, Mali, Ghana, Rome, Malawi, Nigeria, South Africa, Liberia, Uganda, Zambia and Burkina Faso.

“We, leaders of Catholic and other Christian Faith Denominations, Muslim and Indigenous religions met in Nairobi to discuss and propose solutions on how Africa can emerge from multiple and interlinked crisis.

"Amongst them; the impacts of Covid – 19 pandemic, food and nutrition, insecurity, climate change, biodiversity loss, water scarcity, fragile health systems, conflicts, terrorism and debts,” Obala said.

Obala said these crisis were results of social justice issues at the international and domestic levels linked to; tax injustice in globalisation, trade imbalance between donor and recipient countries and gaps in management of public finance at the domestic level.

“As a result, the situation has intensified poverty, inequality, and governance challenges in the continent and set back progress on attainment of sustainable development goals by 2030,” he said.

He said faith communities were among those gathered in the Jubilee movement to advocate for breaking the chains of debt in developing countries in late 1990s.

“As we approach a new Jubilee year in 2025, that promise remains unfulfilled. We celebrated that world leaders delivered 130 billion US dollars in debt relief, which helped advance poverty reduction spending in recipient countries.

"Without addressing the inequalities in the international financial system and domestic governance challenges in recipient countries, the crippling burden of unsustainable debts persists,” Obala said.

The clergy said rising interest rates in major economies and slowing growth inflate debt payments, while cost of living trends erode wages and incomes.

They said stakes of the debt crisis were much higher than before the last Jubilee year.

“We need large investments to save the planet that sustains life in Africa and elsewhere during a window that is rapidly closing. Since 2020, a pandemic took millions of lives around the world and in Africa,” Obala said.

He added: “As poor countries struggled to respond to its health, economic and social effects, the extent of underinvestment in health, education, food and social protection hobbling their actions became clear. Health experts warn that this is unlikely to be the last pandemic,” Obala said.

They proposed debt reduction processes, responsible lending and borrowing, risk sharing, access to concessional loans, re-channeling of special drawing rights, and prudent management of public finances as solutions to these challenges.

“A debt reduction process that guarantees borrowers to request and rapidly achieve reduction of debt payments to at least the extent needed to protect essential development and climate investments.

"The same process should include agreement for creditors to stop collecting payments – provide a stay – while the size of relief needs is under discussion,” Obala said.

Obala said they note with concern the low utilisation of the Common Framework for debt treatments despite the number of countries in crisis as a sign of its ineffectiveness.

The leaders said African governments need to take critical responsibilities to eradicate theft of public funds and corruption of all types and ensure that public finances address the needs of its citizens.

“We reassert that in these momentous times characterised by intersecting global crisis and challenges, the unified voice of African faith leaders emerges with unwavering charity and determination.

"Our convergence in Nairobi isn’t merely a gathering, but a robust testament to the cohesive strength of interfaith unity, combined wisdom, and shared commitment to justice,” Obala said.

“Informed by our sacred scriptures and moral convictions, we resolutely address the pressing issues of debt, governance, and socio-economic disparities plaguing the African continent,” Obala pointed out.