Africa must leverage wealth for stronger global debt negotiation power, experts urge

Experts at the sixth African Conference on Debt and Development (AfCoDD VI) in Nairobi urged African nations to transform their considerable wealth into bargaining power to reshape global debt rules. They emphasized that Africa's natural resources, substantial market size, and growing technological capacity should be leveraged for a stronger voice in the international financial system.

The conference, organized by the African Forum and Network on Debt and Development (AFRODAD), addressed the complexities of Africa's debt burden. Experts stated that the problem extends beyond borrowing and repayment, being significantly compounded by revenue lost through illicit financial flows, inadequate returns from natural resource extraction, and gaps in the data needed for effective negotiations with creditors.

This push for greater leverage follows the African Union leaders' adoption of the Common African Position on Debt. This initiative aims to bolster Africa's collective negotiating stance and advocate for fundamental changes within the global financial architecture. The conference provided a platform for policymakers, civil society organizations, and technology specialists to examine the obstacles hindering Africa's ability to negotiate from a position of strength.

A key focus was the launch of the Black Paper by the Stop the Bleeding Campaign. The paper links Africa's debt challenges directly to the "triple drain" of natural resource extraction without sufficient economic benefit, illicit financial flows that deplete public revenues, and debt servicing costs that divert funds from development. The paper estimates that African governments allocate an average of 16.7 percent of their revenue to debt servicing, with over 30 countries spending more on debt than on healthcare. Research cited in the paper estimates that approximately $2.4 trillion flowed out of Africa between 1970 and 2018, including imputed interest. The campaign advocates for renegotiating extraction contracts, strengthening tax systems, and empowering local communities impacted by extractive industries.

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Africa needed to move from being a rule-taker to a rule-maker in the international financial system.