Climate change continues to ravage Africa, enduring extreme weather events and natural disasters on a scale never seen before. My country (Kenya) has just emerged from the longest drought on record, only to enter a period of devastating floods. Malawi, Zambia and Zimbabwe recently experienced a severe drought that exposed millions of people to hunger; and the Sahel region endured a debilitating heat wave that caused more than 100 deaths in Mali.
Climate change is a growing cause of droughts in Africa that put water supplies at risk. It ruins lives and livelihoods, cripples food production and destroys homes and infrastructure. It affects migration patterns and deepens conflicts; Entire populations are forced to flee in search of alternative means of survival.
To make matters worse, African countries pay interest rates up to eight times higher than the typical World Bank loan, and this further reduces its ability to address climate challenges. This disparity is a reflection of an international financial system created in 1945 (when most African countries did not yet exist) that maintains a bias in favor of rich countries. Many African nations are trapped in a perpetual cycle of debt, with little or no fiscal space to develop and invest in climate change mitigation or adaptation measures.
In practice, today developing countries are net contributors of financial flows to the global economy. Net financial transfers to developing countries they collapsed from a maximum of 225 billion dollars (about 207 billion euros) in 2014 to 51 billion in 2022; and in 2023, 74 billion dollars They left the countries of the International Development Association (IDA, made up of low-income and some lower-middle-income economies) to richer donor countries, in the form of interest payments.
A fair financial system must give all countries equal access to capital
These financial strains hamper the efforts of African countries, not only to adapt to the impact of climate change, but also to transition to a decarbonized economy, not to mention allocating sufficient resources to education, health care health and social protection. That is why Africa (with the rest of the developing world) has long called for urgent reforms to the international financial architecture. But taking the necessary steps in that direction is the task of the G7 and the G20.
The 50th G7 summit to take place this month in Puglia (Italy) will give leaders of major donor countries an opportunity to demonstrate solidarity with Africa by committing to support a process of debt restructuring and cancellation, as well as taking steps to increase the provision of development finance on concessional terms and with longer terms . At the Italy-Africa Summit in January, Italian Prime Minister Giorgia Meloni promised to be Africa’s friend and envoy to the G7, and we remain confident that she and other well-intentioned G7 leaders will unlock the financing Africa needs.
A fair financial system must give all countries equal access to capital. An easy way to do this would be reassignment of special drawing rights (SDR, the international reserve asset of the International Monetary Fund) to the African Development Bank.
Instead of victimizing ourselves, we are eager to do our part to make the world more livable
Four years ago the G20 launched a common framework for debt treatment, but the pace of restructuring remains far from the countries’ needs. Rich nations need to show leadership and unlock the financing African countries need to unlock their growth potential. Continuing to talk about the issue will be of no use.
I recently hosted the IDA Replenishment Summit in Nairobi, where 19 heads of state and government from across the continent discussed the African debt crisis and how climate-related and economic legacy costs have exacerbated it. of the covid-19 pandemic. There was unanimous agreement that we need rich countries to rise to the occasion and increase the provision of funds to help meet Africa’s climate and development needs. We are asking our friends (United States, European Union, United Kingdom and Japan) that provide a stable flow of long-term concessional financing, including at least 120 billion dollars (110.3 billion euros) for the next replenishment of resources (IDA-21), with a view to tripling the fund in 2030.
Instead of victimizing ourselves, we are eager to do our part to make the world more livable. We take the lead and show that it is possible to achieve prosperity without destroying the planet, through green industrialization. During my official visit to the United States, I will make it clear that Kenya (and all of Africa) is ready to get to work.
We invite investors to take advantage of our vast resources in the area of renewable energy sources, our young and skilled workforce and our business-friendly environment. We offer great opportunities in clothing manufacturing, agriculture, information and communications technology. The US is already the largest market for Kenya’s exports and, as we celebrate the 60th anniversary of our diplomatic relationship, we will look for ways to deepen it and generate improvements for both countries in the area of trade and sustainable development.
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