UN chief warns that Africa's inability to access debt relief could lead to social unrest

The lack of resources and insufficient debt relief for African countries is a recipe to create social unrest. This was the conclusion reached by UN Secretary-General Antonio Guterres on Thursday. He proposed new reforms to international financial institutions.

In recent months, a growing debt crisis has sparked civil unrest across Africa's 1 billion people. Protests in Kenya where police clashed against demonstrators protesting proposed tax increases, inspired people in Nigeria and Uganda to take to their streets over the rising cost of living.

African nations are seeking to restructure debts using a G20-designed rework structure called the "Common Framework." However, the scheme has not as expected prompted talks among a variety of leaders ranging from Chinese state owned banks to London-based assets managers and New York-based banks.

In June, Zambia became the first nation to successfully restructure their debt using the scheme. This was more than three year after they defaulted on their loans.

Guterres said at a major China and Africa cooperation summit in Beijing, that Africa's "debt situation is unsustainable" and "a recipe for unrest".

He said that they had no access to debt relief and were short of resources. They also did not receive enough concessional funding in order to meet the basic needs.

Guterres proposed "deep changes to the outdated, unfair and ineffective international financial architecture", and additional stimulus "to give developing countries the liquidity they require while searching for medium- and longterm solutions."

Beijing, which is the largest bilateral lender in the world, hosted 50 African nations at the Forum on China-Africa Cooperation Summit, held this week. President Xi Jinping of China pledged 360 billion yuan (about $50.70 billion) to finance the continent for the next three year.

China approved loans to Africa worth $4.61 billion last year, the highest amount since 2016.

Guterres has praised China’s initiatives in Africa, saying they can drive a “renewable energy Revolution” and "be the catalyst for key transformations on food systems and electronic connectivity".

Angola’s finance minister said on Tuesday that Luanda is considering proposals from Beijing and Brussels, in order to secure funds quickly to help reduce inflation and do more via public-private partnerships. $1 = 7.1005 Chinese Yuan Renminbi (Reporting and editing by Jacqueline Wong, Michael Perry).

(source: Reuters)