By Charlie B. Chilufya, S.J.
As we converge on the precipice of the upcoming COP 28, an exigent issue looms over our collective conscience—financial and debt justice as prerequisites for true climate justice. We find ourselves at a critical juncture where the resilience of our nations is pitted against a burgeoning financial crisis, one that threatens to undermine our ability to mitigate and adapt to climate change effectively.
Ghana and Zambia’s recent defaults underscore a stark reality; when sovereign debts overwhelm, the ensuing austerity cripples our capacity to safeguard the health, education, and environmental fortitude of our societies. This is not an isolated incident but a systemic occurrence, with almost half of the debt defaults or near defaults globally in the past three years occurring in Africa. Our debt burdens soar, propelled by factors such as the pandemic’s long shadow, escalating fuel and food prices, heightened interest rates, and climate-induced economic devastations.
We witnessed, with a mix of aspiration and dismay, affluent nations infusing trillions into their economies to shield their citizens from the pandemic’s worst economic impacts. In contrast, African nations were ensnared in a costly struggle for survival, accumulating debts that now demand $62 billion in repayments this year alone—an amount eclipsing what is necessary to bolster our climate resilience.
These financial exigencies do not merely represent fiscal statistics; they epitomize a severe impediment to our capacity to construct infrastructures resilient to the escalating ferocity of climate calamities. The devastating floods in Libya a couple of months ago that left at least 11,300 people dead and over 10,000 still missing are a harrowing testament to the cost of inaction. The devastating floods in South Eastern Africa, in Malawi, Mozambique and Madagascar that equally left thousands dead and missing is another testament to the cost of delayed action for justice and the protection of life. Africa, regrettably, finds itself borrowing at rates vastly disproportionate to those afforded to the richer nations, even as we strive to rebuild from the very climate crises that our meager emissions did little to engender.
The global financial architecture, conceived nearly eight decades ago at Bretton Woods, is now a relic—a construct ill-equipped to navigate the nuances of today’s multifaceted economic and environmental landscapes. Its inadequacies are manifold; a system too sluggish to respond to the urgency of climate change, too small to fulfill its mandate, and inherently unjust, burdening the poorest nations with the harshest terms.
Acknowledging this systemic inequity, figures like the UN Secretary Genral António Guterres and initiatives like the Bridgetown Initiative spearheaded by Prime Minister Mia Mottley have galvanized support for a reimagined financial paradigm. The confluence of meetings in Paris in June this year and the recent World Bank and IMF Meetings in Marrakesh offered a pivotal moment to crystallize these proposals into tangible reform. Admittedly, slow progress is coming but we are yet to see concrete action for solid global justice.
Africa’s call for a moratorium on interest payments on foreign debt reflects a deep-seated need to reallocate critical resources towards climate resilience, health, and education. We need innovative approaches, like debt-for-nature swaps, which have facilitated countries like Seychelles to protect their marine ecosystems, and automatic suspension of debt repayments in the wake of climate disasters.
Our current debt renegotiation mechanisms are excruciatingly protracted, as Zambia’s three-year ordeal painfully illustrates. A streamlined and effective process is not just necessary; it is overdue for the multitude of countries teetering on the brink of default.
The challenge lies not merely in the magnitude of Africa’s $1.8 trillion debt but in its intricate web, entangling private bondholders, international finance institutions, and creditor nations. China’s recent engagement in Zambia’s debt restructuring is a constructive step, demonstrating the pivotal role it can play as Africa’s largest bilateral lender.
Africa is striving to adapt to the relentless onslaught of climate change, to which it has contributed negligibly. Yet, this adaptation cannot be shouldered unilaterally. The financing chasm is profound, as are our continent’s needs.
Our plea is for collaboration; Africa, with its youthful demographic, untapped renewable energy potential, mineral wealth, and vast expanses of arable land, is an indispensable ally in the global pursuit of prosperity. To secure Africa’s—and thereby the world’s—future, we must reshape global finance to be responsive to Africa’s climatic and financial imperatives.
It is time for the world to heed the call for financial and debt justice as cornerstones for climate justice. As we look towards COP 28, let this be more than a rallying cry; let it be a catalyst for transformative action.
Charlie Chilufya, S.J.
Director, Jesuit Justice and Ecology Network Africa (JENA)