United Nations Economic Commission for Africa (ECA) executive secretary Claver Gatete has said the global financial architecture will not serve Africa’s interests as it was outdated.
In his opening remarks at The Summit of the Future in New York, United States, this week, Gatete said the global financial architecture has been outdated and will not serve the interest of the continent.
“Promises are either not fulfilled or half fulfilled, leaving governments frustrated, young people unemployed and children without a future of hope and prosperity,” Gatete said. He said it would be a disservice to the generations that “come after us” if “we remain theoretical on the reform of the multilateral system”.
Gatete said the multilateral governance structures must change.
“Specifically, we need increased representation for developing countries, improved transparency, a reflection of the role of emerging and frontier markets and regional Multilateral Development Banks. Furthermore, the finalisation and implementation of the international tax cooperation framework must be pursued vigorously,” he said.
He said the meeting came when the foundation of humanity was being tested “and Africa is bearing the brunt”.
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Multiple crises have exacerbated the challenges of finance, debt, climate and energy, Gatete said.
“21 African countries are in or at high risk of debt distress and public debt has increased by over 180% since 2010 and currently exceeds 60% of GDP. Basic social expenditures are being crowded out and there is limited access to long-term concessional finance,” he said.
Gatete said the unprecedented climate effects were costing up to 5% of Africa’s GDP annually.
He said the continent will struggle to attract sufficient investments “because the rules of engagement of global rating agencies do not favour Africa”.
“We also see imbalances in borrowing costs. For example, Africa’s borrowing cost is 4 times higher than the United States and even more than four times than Germany,” Gatete said.
He said Africa could be the global power force “if we address the critical gaps for a fair and promising future”.
“We must take deliberate steps to invest in our youth because 1 in 3 young people globally will be African by 2050.”