Only nine countries endorse ‘Borrowers’ Platform’ amid concerns over African nations’ debt burden

Nine countries have so far endorsed the Borrowers’ Platform, a new initiative intended to give developing countries a stronger collective voice in negotiations over sovereign debts, a senior United Nations official said on Thursday.

The are comprised of five African countries and four others from the rest part of the world.

Those from Africa are the Central African Republic, Egypt, Ghana, Madagascar and Sudan.

The rest from other parts of the world are Colombia, Honduras, Nepal and Pakistan. Egypt is serving as the platform’s interim chair and Pakistan its vice-chair.

The Officer-in-Charge of the Debt and Development Finance Branch of the United Nations Trade and Development (UNCTAD), Penelope Hawkins, disclosed this at the sixth African Conference on Debt and Development (AfCoDD VI), organised by the African Forum and Network on Debt and Development (AFRODAD) in Nairobi, during a session on making the Common African Position on Debt (CAP) and the Borrowers’ Platform work for citizens.

She urged civil society organisations across Africa to ask their governments why they had yet to join the platform.

“Civil society must be asking your governments, are you joining the Borrowers’ Platform? Why are you not joining the Borrowers’ Platform? What is it there that is holding you back?” she said.

The Borrowers’ Platform was launched in April during the IMF-World Bank Spring Meetings, with UNCTAD serving as its secretariat.

It is intended to help borrowing countries strengthen debt management, share expertise and coordinate their positions in global debt discussions.

Why the platform matters

Ms Hawk noted that the platform was created because developing countries have had limited influence over the international financial system, despite being heavily affected by decisions made within it.

She said the imbalance remains visible in institutions such as the World Bank and International Monetary Fund, where changes in representation have not fundamentally altered voting power.

Ms Hawkins explained that African debt managers had expressed interest in contributing their technical expertise to the platform and aligning it with the CAP.

She revealed that the issue was discussed at a meeting in Harare, Zimbabwe, where African debt managers considered how their expertise could contribute to the initiative.

Turning the CAP into action

The discussion came months after African leaders adopted the Common African Position on Debt.

The African Union Heads of State and Government adopted the CAP in February as a continental framework for addressing debt sustainability, debt restructuring and reforms to the global financial system.

But speakers at the session said adoption was only the beginning. The challenge now is to turn the position into action that can influence how African countries borrow and negotiate with creditors.

Shem Joshua noted that African countries needed to find a way to turn political agreement into collective action.

“The fundamental question that we need to ask ourselves is not about the rate of power, but how do we convert the political convergence into a collective agency or collective strategy?” Mr Joshua said.

Participants explained that African countries negotiating individually with powerful creditors often faced an unequal bargaining position. A coordinated position, they argued, could give them greater leverage during debt restructuring and negotiations over borrowing terms.

Panellists also called for proposed debt restructuring arrangements to be made public before they are concluded, allowing parliamentarians and citizens to scrutinise them.

Bob Gikuyu, a senior theology advisor at Christian Aid, said faith-based organisations could help bring the experiences of communities affected by debt and austerity into national and international discussions.

When debt takes money from services

The cost of debt to citizens was illustrated with figures presented from Zambia.

Participants revealed that about 49.1 billion Zambian kwacha was released in the budget in June, with 34.9 billion kwacha — about 71 per cent — going to debt servicing.

Only about 11 per cent went to social and capital expenditure.

Speakers said the figures showed why debt restructuring should be judged not only by macroeconomic indicators but also by whether governments can continue providing healthcare, education, social protection and other essential services.

Participants also said that developing countries had paid more than $500 billion in additional interest costs in a year compared with what they would have paid if they had borrowed at rates available to developed economies.

They further noted that debt-servicing costs in developing countries had risen by about 100 per cent over the past decade, while government revenues had grown by only 39 per cent.

Ms Hawkins, who is one of the panellists, noted that the full list of countries that had endorsed the Borrowers’ Platform would be made public ahead of a governance meeting scheduled for October.

She urged more African governments to join, saying broader participation would strengthen developing countries’ collective voice in efforts to reform the international financial system.

Kenya’s debt oversight under scrutiny

A second AfCoDD VI session examined how citizens can monitor the implementation of the Common African Position on Debt.

The session, titled “From Commitment to Accountability: Citizen-Led Monitoring of Africa’s Common Position on Debt,” brought together parliamentarians, auditors, civil society organisations and development advocates to discuss debt transparency, public audits, parliamentary oversight, domestic resource mobilisation, illicit financial flows and citizen participation.

Among the speakers were Kenyan Senator Okoiti Omtatah, Peninnah Mbabazi of the Centre for Economic and Social Rights (CESR), Botswana MP Dumelang Saleshando and Gladys Madara of TrustAfrica. Jon Kafuko, Programmes Manager at the Youth for Tax Justice Network, moderated the session.

Mr Omtatah explained that Kenya already had a constitutional framework for managing public finances and borrowing, but enforcement and public understanding remained major problems.

“We don’t need more laws. We need more informed citizens,” they said.

They pointed to Chapter 12 of Kenya’s constitution, which provides a framework for managing public resources, and questioned how the government tracks money obtained through external borrowing, including Eurobonds.

Following the money, they said, should be the starting point for any audit of public debt.

Seven debt audit reports await Parliament

A representative of Kenya’s Office of the Auditor-General said the office audits public debt annually and receives financial statements showing how debt was serviced during each financial year, as well as the country’s debt stock at year-end.

The representative said the office was conducting a comprehensive audit of Kenya’s public debt, including concerns surrounding illegitimate or “odious” debt.

But they stated that the parliament’s handling of audit reports remained a major obstacle to effective oversight.

The office had submitted about nine performance audit reports relating to public debt to Parliament, but only two had been considered, leaving seven awaiting discussion.

They also cited inconsistencies in laws and regulations governing public debt and fragmented debt-management information systems as other challenges.

Under the programme, civil society organisations can work with the office and receive training before audits begin. Citizens can participate in planning, conducting and reporting audits.

Debt, climate and human rights

Ms Mbabazi said Africa’s debt crisis was closely linked to the continent’s climate and human rights challenges, with fiscal cuts and shrinking government revenues leaving some countries borrowing to meet basic budget obligations while debt repayments and conditions attached to international financing reduced resources available for development.

Countries already struggling with debt were also finding it difficult to secure adequate climate finance, she said.

Ms Mbabazi called for debt, tax and climate finance reforms to be considered together, arguing that climate finance should not deepen countries’ debt burdens.

She also urged policymakers to put human rights at the centre of discussions on debt and climate finance.

Debt and Kenya’s next election

The discussion later turned to whether public debt could become a bigger issue in Kenya’s next general election.

The moderator asked how voters could be encouraged to assess candidates based on their records and plans for managing public debt rather than focusing mainly on political competition.

Mr Omtatah stated that Kenya’s intense presidential politics made sustained issue-based discussions difficult.

They said many voters were focused on removing President William Ruto without paying enough attention to what should happen afterwards.

They warned that changing presidents without changing the systems governing public finances could simply reproduce the same problems under another administration.

The senator also referred to legal actions they had instituted against former President Uhuru Kenyatta, President Ruto and other public officials over government borrowing.

They said the cases involved claims running into trillions of Kenyan shillings and alleged that funds borrowed offshore did not reach Kenya.

Botswana calls for less borrowing

Dumelang Saleshando, a Botswana parliamentarian and chairperson of the SADC Parliamentary Forum Standing Committee on Trade, Industry, Finance and Investment, said African parliaments needed stronger oversight of government borrowing and spending.

They said Botswana’s Parliament remained weak in initiating legislation because most bills originated from the executive.

They also criticised parliament’s record in scrutinising national budgets, noting that no national budget had been rejected by Parliament or subjected to substantive amendments as Botswana approaches 60 years of independence.

READ ALSO: Reps probe insurance gaps in N1.12tn Anchor Borrowers Scheme

Mr Saleshando urged citizens to demand accountability from elected representatives throughout their terms rather than waiting for elections.

They also called for greater domestic production, trade and industrialisation to reduce African countries’ dependence on borrowing.

Africa’s continued reliance on exporting raw materials while importing finished products, they said, had contributed to the continent’s economic vulnerability.

Adding value to raw materials and expanding trade among African countries, they argued, would create jobs, broaden the tax base and reduce governments’ dependence on borrowing.

Making debt accountability a citizens’ issue

Ms Madara said the Common African Position on Debt should become something ordinary citizens can understand and monitor.

She called for existing civic organisations and social movements to build a broad constituency around implementation of the CAP rather than creating new structures.

Student movements, women’s organisations, agricultural groups and other civic networks could monitor issues linked to education, health, agriculture, employment and climate change, she said.

“We need to be able to bridge the gap that is between the continental commitments and the local realities that people are experiencing,” Ms Madara said.

She said TrustAfrica was investing in political economy education and research to develop a new generation of advocates, including journalists, students, academics and trade unionists.