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African leaders want affordable financing

Developing country leaders recently rallied in Paris, highlighting the urgency for reform of the global financial architecture to counteract economic, environmental and social adversities, and to rescue the United Nations (UN) Sustainable Development Goals.

“Predictable, affordable and sustainable financing is critical in allowing African countries to get back on track to achieve the Sustainable Development Goals,” Economic Commission for Africa (ECA) acting executive secretary Antonio Pedro said at the Sustainable Debt Coalition event organised on the margins of the Summit for a New Global Financing Pact in Paris.

The summit was convened by French president Emmanuel Macron to develop a roadmap to ease the debt burdens of low-income countries, while freeing up more funds for development and climate financing.

The Sustainable Debt Coalition, launched by Egypt at COP27, aims to address critical financing challenges faced by emerging markets and developing economies, particularly the debilitating impacts these have on climate action and development.

It introduces a fresh consultation pathway that intersects debt, climate, and developmental concerns, fostering dialogue for innovative solutions.

The coalition is a means of ensuring that sustainability is suitably addressed in all debt instruments, and as a means of ensuring fairness in debt treatment, as well as affordable and predictable access to finance for developing countries.

Pedro highlighted that the Sustainable Debt Coalition’s push for reforms is aligned with the SDG Stimulus, an ambitious plan to secure US$500 billion per year in additional financing for sustainable development unveiled by the UN secretary general, Antonio Guterres, earlier this year.

African countries are facing numerous challenges stemming from the impacts of the Covid-19 pandemic, the ongoing war in Ukraine, and the escalating economic costs of climate change, among other crises.

The Sustainable Debt Coalition fosters collaboration between creditor and borrower nations, with a focus on sustainability and debt management.

The coalition’s objectives include reducing debt costs, expanding access to sovereign debt guarantees and blended finance, and creating fiscal space for investments with positive environmental outcomes.
– United Nations Economic Commission for Africa