The News and Events published every week include conferences, major developments in the field of International Economic Law in Africa at the national, sub-regional and regional levels as well as relevant case law.
A Flurry of African Sovereign Debt News brings to you regular updates on events and happenings in Africa that reveal how sovereign debt issues are engaged by the various stakeholders.
In this symposium, our contributors react to Prof Taylor’s paper by interrogating embedded structures of knowledge generation and creation, economic development in Latin America, international law, disadvantageous investment agreements, and continental integration. In particular, the essays explore how these arrangements reshape traditional centre-periphery relations.
A primary objective of the AfSDJN is to undertake research, advocacy, tactics and strategies around the changing nature of debt, globally and in Africa, which threatens economic development, social cohesion and several gains made in building social contracts in recent years. Afronomicslaw.org is grateful to Open Society Initiative for Southern Africa, (OSISA) Economic Justice Program and Open Society Foundation’s African Regional Office.
It is a special day when open scepticism by some African states towards investor-state dispute settlement (ISDS) is likened to hegemony. This characterization suggests that critical voices, once banished to the outskirts of ongoing discourse tabling reforms to ISDS in particular and to international investment law (IIL) more generally, now occupy the center of action and claim the mantle of thought leaders. But instead of cherishing this potential turning point for international law development by African states, we are urged to deny and disregard the views from Africa.
We recognise that the current proposal is limited in resolving the longer-term debt burden of developing countries. The stay of enforcement does not introduce any changes in the substantive obligations contracted by the parties. Thus, the standstill will only temporarily suspend the execution and enforcement of eligible financial obligations during the designated period. Meanwhile, interest on the principal will continue to accrue. The proposal is also meant to be used as a ‘shield’ rather than a ‘sword’, i.e. the stay will only be triggered as a defence by the sovereign debtor in the event of a claim against it by a private creditor.
The Mozambican case of odious debt is an illustration of several similar cases around the world whereby consultants from multinational corporations identify development countries with something of value, such as minerals, and persuade the authorities of these countries to secretly take on huge development loans with banks. In most cases, the money never reaches the countries. Rather, the money is transferred directly from the banks to contractors and the countries are then left with massive debts. Resources and companies from developing countries are given as collaterals for these loans. Therefore, the resources that countries should use to invest in development are transferred to service these odious debts. In summary, this is what happened in Mozambique.
In the tax world, this is significant because businesses react to tax policy. Tax policy, in turn, stimulates the interest of both local and international investors who are the key drivers of economic growth. Therefore, the challenges of the economic downturn will be more glaring and significant for African countries, who have a greater reliance on tax revenue from large taxpayers than more advanced economies.
Rwanda envisions itself as the next Luxembourg or the next Singapore; a new financial center that will turn East Africa into an international power player and will service financial transactions throughout the African continent and beyond. While other financial centers are often accused of being tax havens, Rwanda is determined to avoid that label. It says the new hub, the Kigali International Financial Center (KIFC), will not allow business activity designed to avoid taxation. Details are forthcoming but Rwanda Finance Limited, the government entity that is developing the project, says all investments at KIFC must have a substantive business and economic purpose.
The importance of law in development discourse, especially in times of global crises as captured under Sustainable Development Goal 16 is a critical factor in establishing and maintaining the rule of law by empowering the most vulnerable persons and groups in society to exercise their fundamental human rights against unfettered legal regimes and political leadership.
