African Debt Conference Examines G20 Framework, Gender Impact on Finances
These recommendations will likely emphasize the importance of transparency, inclusivity, and gender-responsive policies in shaping Africa's economic future.
MAPUTO, Mozambique— As African nations grapple with mounting debt burdens, experts and advocates gathered in Mozambique are calling for an overhaul of global financial systems that they say disadvantage developing countries and women in particular, writes Winston Mwale.
The second day of the 4th African Conference on Debt and Development (AfCoDD IV) on Thursday featured intense discussions on the G20 Common Framework for debt treatments and its impact on African economies.
Panelists critiqued the framework's effectiveness and explored alternative solutions, with a focus on feminist approaches to public debt management.
Dr. Yungong Theophilus Jong of AFRODAD, who moderated the session, set the tone by highlighting the urgency of the debt crisis facing many African nations.
"We have ended up with cosmetic solutions," Jong said, referring to past initiatives like the Debt Service Suspension Initiative and special drawing rights allocations that have failed to adequately address the continent's debt challenges.
The G20 Common Framework, launched in November 2020 to help low-income countries restructure their debt, came under particular scrutiny.
Isaac Mwaipopo, executive director of the Centre for Trade Policy and Development in Zambia, shared his country's experience as one of the first to seek debt treatment under the framework.
"The process of just getting the debts to be resolved under the G20 common framework has been quite tedious for our country," Mwaipopo said.
He highlighted several challenges, including the lengthy duration of negotiations, the complexity of dealing with multiple creditors, and the lack of mandatory private sector participation.
Zambia recently announced a deal to restructure about $3 billion of its debt, but Mwaipopo noted that significant issues remain.
"We still have a significant portion of our debt, about three billion, that has not yet been finalized in terms of finding a solution," he explained.
Transparency also emerged as a key concern. Mwaipopo revealed that non-disclosure agreements signed during negotiations made it difficult for civil society organizations to access information about the process.
"We are mostly left to interact with the outcomes after they were done," he said, calling for more openness in future debt restructuring efforts.
Dr. Emmanuel Owusu-Sekyere, director of research, policies, and programs at the African Centre for Economic Transformation in Ghana, provided insight into his country's experience with the G20 Common Framework for Debt Treatments.
"Ghana has been relatively fortunate compared to other countries in implementing the G20 framework," Owusu-Sekyere said.
"We quickly formed a creditor committee chaired by China and France, which sent assurances to the IMF that they were ready to renegotiate loans with Ghana."
He noted that by June 2024, Ghana had managed to renegotiate $13 billion in debt, resulting in a 30-40% reduction in bond principal amounts.
This restructuring, according to the Ministry of Finance, saved Ghana $4.7 billion in debt stock relief and $4.4 billion in debt service payments.
However, Owusu-Sekyere cautioned that the domestic debt exchange had significant implications for the local financial sector, with banks holding 30-50% of government bonds.
"The stability of the financial sector is critical," he emphasized.
"We are hoping for another $2.4 billion from the World Bank for a financial sector stability fund to prevent a banking sector collapse in Ghana."
Naledi Joyi, a gender expert from the Centre for the Study of Violence and Reconciliation in South Africa, stressed the importance of incorporating feminist principles into discussions on global financial reform.
"There's broad recognition that the international system is no longer fit for purpose," Joyi stated.
"But depending on who you speak to, the solutions vary greatly. We believe in a complete overhaul and transformation of the global financial architecture, aligning with feminist principles."
Joyi highlighted the ongoing efforts to shift global tax system oversight from the Organization for Economic Cooperation and Development (OECD) to the United Nations, describing it as a move towards a more democratic and inclusive platform.
"At the UN, every country has a voice and a vote, regardless of economic size or influence," she explained.
"This aligns with feminist principles of participation and inclusivity."
Dr. Jamela Hoveni from the Institute for Economic Justice emphasized the need for African countries to work collectively in debt negotiations.
"We've seen the African group come together in tax discussions, essentially saying, 'If you want to negotiate with us, it's all of us or none of us,'" Hoveni said.
"We need to see that type of collective action within the debt space as well."
Hoveni suggested the formation of a "borrowers' club" to strengthen African countries' negotiating positions.
She also stressed the importance of broader solidarity among Global South countries facing similar historical contexts and current challenges.
Kamal Ramburuth, a researcher with the Institute of Economic Justice in South Africa, highlighted the interconnection between trade policies and gender equality.
"The way the World Trade Organization is framing its policies around the liberalization of the agricultural industry is not translating into the economic empowerment of women," Ramburuth stated.
He cited statistics showing a 23% drop in agricultural employment following the implementation of the WTO's Agreement on Agriculture, with women disproportionately affected.
Ramburuth called for gender impact analyses for every trade agreement countries sign. "In Ghana, female-led households spend 18% more on consumption and VAT than male-led households," he noted.
"We've got to think about the impact of trade policies on these women, especially those in the informal sector."
Lee Everts from the United Nations Economic Commission for Africa (UNECA) addressed the changing global economic landscape and its implications for international taxation and trade policies.
"By 2050, China and India's combined GDP is projected to surpass that of the U.S., Japan, UK, Italy, Germany, and France," Everts said.
"How will these countries change the norms around international taxation and trade policy design?"
Everts emphasized the need to consider gender disparities in workforce participation, noting that women make up 67% of China's workforce but only 16% of India's.
He also highlighted the importance of protecting women's participation in e-commerce, where currently less than 33% of women are integrated.
"How are we going to protect the e-commerce space for women to utilize for their economic development?"
Everts asked. He suggested exploring preferential tax treatments and presumptive taxation as potential tools to support women in the informal sector.
The conference discussions underscored the complex interplay between debt management, tax policy, trade agreements, and gender equality.
Participants agreed that addressing Africa's debt crisis requires a multifaceted approach that considers the unique challenges faced by women and informal sector workers.
As the conference continues, delegates are expected to formulate concrete proposals for reforming the global financial system in ways that prioritize the needs of developing nations and promote inclusive economic growth.
The AfCoDD IV, which concludes on Friday, aims to produce a set of recommendations for African governments and international financial institutions to address the continent's debt challenges and promote sustainable development.
As one delegate put it, "The solutions we develop here must work not just for governments and creditors, but for the millions of African citizens – especially women – whose lives and livelihoods hang in the balance."