African Union chief raps dysfunctional global finance system

Zvamaida Murwira in Addis Ababa, Ethiopia
PRESIDENT Mnangagwa yesterday knuckled down to business with other Heads of State and Government at the 36th Ordinary Session of the African Union Summit, where United Nations secretary-general Mr Antonio Guterres castigated the “dysfunctional and unfair global financial system” for failing developing countries such as Zimbabwe.

Due to sanctions imposed by the United States and its Western allies, Zimbabwe is one of the African countries most affected by the global financial system, as it has been denied funding by international financial institutions.

Mr Guterres said international creditors should review their business model and allow Africa to play a greater part in the global economy.

“The global financial system routinely denies them debt relief and concessional financing, while charging extortionate interest rates,” he said.

Some countries on the continent, he said, cannot climb the development ladder as they have one hand tied behind their backs. He said there was a need for Africa to mitigate the effects of climate change, as the continent is equally bearing the brunt of consequences it is least responsible for since its share of carbon dioxide emissions is the lowest.

“Vital systems of the economy were suffering as a result of starved investment in Africa in health, education, green technology and social protection,” he said.

“African countries cannot invest in these critical areas and climb the development ladder with one hand tied behind their backs. I have called on Bretton Woods (institutions) to radically transform the global financial architecture. Developing countries should have a far greater voice in global institutions, including financial institutions.

“We need a new debt architecture that provides debt relief and restructuring to vulnerable countries, including middle-income countries, while providing immediate debt suspension and write-downs to countries in need. Multilateral development banks should transform their business model and accept a new approach to risk.”

On climate change, Mr Guterres said, the injustice was evident because African countries continue to endure floods, drought, famine and heatwaves despite its low contributions to greenhouse gas emissions.

He, however, commended African countries for demonstrating leadership on climate change through green economy strategies and efforts to protect tropical forests, among other measures.

Meanwhile, African leaders called for African solutions to the challenges facing the continent.
Newly-elected AU chairperson and Comoros President Azal Assoumani called for developed countries to undertake debt restructuring and other measures aimed at mitigating the debt burden on African countries.

He also commended AU’s founding fathers for their visionary leadership.
President Assoumani took over from Senegalese President Macky Sall yesterday.
Ethiopian Prime Minister Abiy Ahmed said African countries needed to be at the centre of solving problems affecting the continent.

“In this respect, allow me to restate yet again the need to establish an AU continental media house. Until Africa tells her own story, her image will remain distorted, a distortion that affects not just how others view us but also how we view ourselves. We owe it to ourselves and to our children that Africa’s truth be told as they are untainted with external interests and biases,” he said.

After attending the session, President Mnangagwa later held a closed-door meeting with International Organisation for Migration director-general Mr Antonio Vitorino.

Last night, he was expected to attend a dinner together with other African leaders.
Today, President Mnangagwa will attend the summit and also hold other bilateral meetings.

This year’s AU summit is running under the theme “Year of AfCFTA: Acceleration of the African Continental Free Trade Area Implementation”.

It is meant to generate more political commitment and accelerate the effective implementation of the AfCFTA, which is projected to benefit the continent’s over 1,2 billion people.