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HomeEconomyIndebted African countries charge 'exorbitant' interest rates, says UN chief

Indebted African countries charge 'exorbitant' interest rates, says UN chief

Davit Endshaw

ADDIS ABABA (Reuters) – Indebted African countries are getting an unfair deal from the international financial system, UN secretary The UN secretary-general wants to impose “exorbitant” rates on them, Antonio Guterres told the opening of the annual African Union summit on Saturday

. A far-reaching reform of the financial structure to more effectively meet the needs of developing countries in Ethiopia.

“We need a new debt architecture that provides debt relief and restructuring for fragile states,” he said.

“The global financial system routinely denies (developing countries) debt relief and concessional financing, while charging exorbitant interest rates.”

The coronavirus pandemic has left many impoverished Countries are in debt because they are expected to keep paying their debts despite the huge hit to their finances.

Public Debt Ratios Sub-Saharan Africa’s debt is at its highest level in more than two decades, the IMF said last year. They survived the crisis, but the end of the process was delayed.

Other countries that did not seek to restructure their debt, such as Kenya, saw its debt sustainability indicators deteriorate after the pandemic hit its finances.

Guterres All of these factors hinder their ability to invest in key areas such as health and education, they said.

“African countries cannot … climb the development ladder with one hand tied behind their back,” he said.

Ethiopian Prime Minister Abiy Ahmed echoed the call.

growth trajectory, but that will not happen without sufficient restructuring to make our external debt sustainable,” he said.

From Sahel to Armed conflict in the Horn of Africa and the effects of drought and floods have displaced an increasing number of Africans.

Hunger It has also worsened in some countries.

Somalia is on the brink of famine after five failed rainy seasons, with hundreds of thousands suffering catastrophic food shortages Shortages.

“We need to critically assess why a third of the world’s hungry people are on our continent,” Abbie said.



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