UNECA says international financial institutions no longer serve Africa’s interests

The Executive Secretary of the United Nations Economic Commission for Africa (UNECA) said this Monday that international financial institutions no longer serve the interests of African countries, advocating a reformulation of the international financial architecture.

“The international financial institutions created after the Second World War no longer serve the interests of Africa, they must change because they are based on a model in which some of the countries that exist in Africa today did not even exist at that time. we are now 54 countries and we need a restructuring of the international financial architecture,” Clover Gatete said at a press conference in Victoria Falls, Zimbabwe.

At the first press conference since taking over from Vera Songwe to kick off a meeting of African finance ministers later this month in the Zimbabwean city, Clover Gatete said the meeting of government officials would be critical to presenting proposals being discussed to reform the global economy. financial architecture.

These proposals range from green development finance to reforming debt resolution terms, as well as mobilizing more development finance, both external and domestic.

“At UNECA, we believe that the implementation of the Sustainable Development Goals or Agenda 2063 will be difficult if most resources are used only to repay loans, since only a small part of the tax revenues of African governments goes to finance development, and this makes It becomes very difficult when we have to choose between paying off loans or investing in education or health care,” said Clover Gatete, adding that expanding taxation is important.

Among the proposals to be discussed at the meeting of finance ministers are the reallocation of special drawing rights issued by the International Monetary Fund, a new mechanism for restructuring the debt of the most indebted countries, and the application of principles and goals that were discussed at international meetings.

Paris Summit on a New Global Financing Compact or G20 guidelines for mobilizing three billion dollars (€2.7 billion) for climate change investment, split between $1.8 billion (€1.6 billion) for climate and 1 .2 billion dollars (1.1 billion euros) to finance green development were among the international forums at which proposals were laid out.

“There will be a summit this year to discuss these topics, this is the Future Summit. [em setembro, nas Nações Unidas]which will reform the architecture of the global financial system,” recalled the UNECA Executive Secretary.

“It’s not just a question of money, it’s also a question of governance, how to mobilize resources internationally on an ongoing basis, but also domestically, what African countries can do to achieve comprehensive fiscal reform and develop the capital markets that are needed to capitalize economy.” private sector and allow more investment,” concluded the person in charge.

Also present at the meeting, Zimbabwe’s finance minister advocated greater use of financing from multilateral development banks, using their high credit ratings to guarantee lower interest rates and a “more efficient, faster and more transparent” debt resolution mechanism. focus on financing to increase private sector investment in the development of the green and digital economy.