It remains imperative for both the executive and lawmakers to find the political will to push for judiciousness in debt management; thus, eliminating the danger of excessive and unproductive debt. The government of Nigeria must adopt responsible borrowing practices in order to arrive at a sustainable debt stock. As it stands, the Ways and Means advances facility may be prone to abuse if Presidents can easily approach the CBN for loans without repaying and transferring the burden to the average citizen. The AfSDJN recommends that the Tinubu administration only approaches the Central Bank as a “lender of last resort” in strict conformity with Section 38 (1) of the CBN Act. The Federal Government must devise more proactive ways of raising revenue to reduce such borrowing activities as it increases Nigeria’s debt servicing burden as highlighted. Convened by Afronomicslaw.org with the support of Open Society for Southern Africa, (OSISA), the AfSDJN's activities are tailored around addressing the threats that sovereign debt poses for economic development, social cohesion and human rights in Africa. It advocates for debt cancellation, rescheduling and restructuring as well as increasing the accountability and responsibility of lenders and African governments about how sovereign debt is procured, spent and repaid.
As Ghana navigates the complexities arising from its debt crisis, it is equally faced by a galloping inflation, a depreciating currency, a general decline in the quality of life coupled with the high cost of living. It has become clearer that the completion of the review and unlocking of the $600 million disbursement hinges on Ghana’s official creditors swiftly reaching an agreement on specific terms of debt treatment. The AfSDJN continues to urge the IMF to actively and urgently commence deliberations on a new comprehensive, fair and effective sovereign debt restructuring mechanism based in the United Nations that would be binding on all creditors, including commercial creditors, and that would make it difficult for hold-out creditors to prevent sovereign debt workouts.
December 18, 2023
In summary, as stakeholders gather and discuss at the COP28 summit in Dubai, it is important for them to bear in mind that while debt-for-climate or ecological debt for fiscal debt swaps offers a promising approach to addressing debt and climate challenges simultaneously, they need to be implemented with careful attention to transparency, accountability, and integrity. Otherwise, it could become just another pathway to facilitate IFFs in Africa, which have the potential to undermine the fiscal benefits that should ordinarily result from these swaps.
Amidst all this, Ethiopia's reputation with foreign credit agencies continues to suffer as a result of the national treasury's declining foreign exchange reserves. The downgrade of Ethiopia's long-term foreign-currency issuer default rating to “CC” from “CCC-” by Fitch Ratings has brought attention to this financial vulnerability. With Ethiopia's external cash dwindling and major gaps in external funding, Fitch downgraded the country, raising the possibility that default is imminent. The Fitch assessment states that although China has offered to postpone Ethiopia's debt service obligations for a year, it anticipates that these bilateral negotiations will not be "sufficient to address the large financial gaps and improve debt sustainability."
The AfSDJN notes that Zambia’s experience continues to prove the case for a new comprehensive, fair and effective sovereign debt restructuring mechanism based in the United Nations that would be binding on all creditors, including commercial creditors, and that would make it difficult for hold-out creditors to prevent sovereign debt workouts.
Against the background of the highlighted liquidity injections, the Malawian government needs to be wary of the funds that are being continuously extended to them in the name of “foreign direct investments”. While it is anticipated that these financial facilities “will greatly enhance our foreign exchange reserves position and provide the macroeconomic stability needed for economic and business growth”, the AfSDJN cautions against liquidity injections that are accompanied by conditionalities that have not been made public. It is imperative that these conditionalities be explicitly defined, and that the terms and conditions be made accessible to the public.
This post seeks to unravel the intricate dimensions of digital solidarity in the face of crises, with an explicit concentration on the predicaments associated with sovereign debt. It argues that digital platforms have great potential to encourage shared responsibility and facilitate collective action to resolve sovereign debt crises. Through the employment of technology to close gaps, smoothen communication, and facilitate collaborative problem-solving, digital solidarity might lay the groundwork for creating internationally endorsed solutions to sovereign debt crises, thus fostering a more robust and inclusive global economic environment. In addition, the post will examine the challenges of digital solidarity in addressing sovereign debt crises. It will examine the underpinnings of international law and policy, exploring how they may influence or shape the notion of digital solidarity and aims to conceptualise effective strategies to mobilise digital solidarity in crisis response and debt resolution. By shedding light on the transformative power of digital solidarity as a practical tool for global economic reform, this post aspires to contribute to a more balanced and resilient global economy. This post argues that harnessing digital solidarity can lead to more equitable solutions to sovereign debt crises.
The US Government announced on October 30th that the Central African Republic (CAR), Gabon, Niger, and Uganda will be removed from the list of 35 sub-Saharan African (SSA) countries that are eligible for market access under the African Growth and Opportunity Act (AGOA). The announcement came on the eve of the 20th AGOA Forum in Johannesburg, South Africa, on the 2nd to 4th of November 2023. According to the US Government, CAR and Uganda have engaged in gross violations of internationally recognised human rights. This paper reflects on the decision, which is not the first by the Biden administration in the last few years. This paper argues that the recent decision by the US is an example of developed countries using trade incentives and sanctions to achieve their geopolitical interests in Sub-Saharan Africa (SSA) under the pretext of promoting human rights standards.
The African Sovereign Debt Justice Network, (AfSDJN), is a coalition of citizens, scholars, civil society actors and church groups committed to exposing the adverse impact of unsustainable levels of African sovereign debt on the lives of ordinary citizens. Convened by Afronomicslaw.org with the support of Open Society for Southern Africa, (OSISA), the AfSDJN's activities are tailored around addressing the threats that sovereign debt poses for economic development, social cohesion and human rights in Africa. It advocates for debt cancellation, rescheduling and restructuring as well as increasing the accountability and responsibility of lenders and African governments about how sovereign debt is procured, spent and repaid.