Debt Governance and Sustainable Development Financing in Africa: Towards the Implementation of the Common African Position on Debt (FFD Forum Side Event)

Good morning, everyone. If I could ask everyone to take their seats, I think that we have to make a start to remain in the schedule. So thank you for taking your seats and we'll make a start straight away.

Your Excellencies, Ambassadors, dear colleagues, distinguished delegates, and friends, it's a pleasure for me to welcome you all to this High-Level Dialogue on Debt Governance and Sustainable Development Financing in Africa. Co-organized by the African Union and the United Nations Economic Commission for Africa, and also with the support of my office. I'm with the Office of the Special Advisor on Africa. I am Jean-Paul Hardin, and I'm the Director in that office, and I'm very pleased to be able to moderate today's discussion. We know that we are in a very difficult moment globally, and this translates into very direct consequences for the African continent. Africa has increasingly focused on raising its own resources, recognizing dramatic changes in the landscape for official development assistance, and those constraints now have been going on for a couple of years, but this is coupled with rising borrowing costs and the reduced access to concessional resources and the uncertainty in global capital markets, and all of this is placing significant pressure on Africa's fiscal space. At the same time, debt service obligations are absorbing a rising share of government revenues and tightening the trade-offs between debt servicing and development spending. Over 40% of African countries are spending more on debt servicing than they are investing in health, putting the SDGs at risk and putting Agenda 2030 at risk. These challenges are compounded by a more complex creditor landscape, as well as limitations in current sovereign debt restructuring architecture, resulting in delays and difficulties in restoring debt sustainability, as well as limiting access to markets at a period where the need for finance is increasing. Part of this response has been the adoption by the African heads of state and government of the Common African Position on Debt, providing a unified framework to strengthen debt governance, improving financing outcomes, and advancing reforms of the international financing system. Of course, this goes hand in hand with the move towards a borrowers' platform, and we hope to have that discussion in terms of how this this African Common Position on Debt can help strengthen as well the agency of African countries in responding to the challenges of debt. We will begin with 2 opening interventions with presentations to frame the discussion, followed by a panel conversation, including with inputs from our distinguished ambassadors. I will start We— by inviting our first speaker, my dear friend Stephen Karingi, the Director of Macroeconomics, Finance, Governance, and Planning Division at the United Nations Economic Commission for Africa, and he will present the key findings of ECA's analytical work on debt governance, and will be followed by Mr. Patrick Nzanaolomo, the Head of Economic Policy and Sustainable Development at the So, Stephen, over to you.

Thank you so much, JP, and good morning. Thank you for joining us, and those who are joining us online, thank you. So my presentation is just to give you a highlight of the contents of the 3rd edition of the Economic Governance Report. I'm happy that Penelope is here because she was one of the peer reviewers. So what you see is also a part of what we got from the external peer reviewers that we had. I think the first key facts, Jean-Paul— I like calling him JP— has actually told us about the challenge that we are having with debt. and what is going on in the continent with the crowding out of essential social and development spending because of the costs, the payments that the countries are making. Now, so this report that we put together, we're basically aiming to change the conversation because there is so much focus when we talk about debt on the question of solvency, the macro metrics, and rarely do we talk about the development angle of debt. Even when you look at the current frameworks, be it the DSSI, the Common Framework, the Debt Route Table, most of them tend to have a short-term approach and do not actually address the structural drivers of debt. They are driven by the creditors and looking at the repayment capacities, but they don't answer the question, does debt really finance development? And so the report proposes a way forward where we look at the question of growth-enhancing governance, what we are calling the new paradigm, that the conversations about debt should focus on structural transformation. Mission, alignment with national growth and productive investments, and also it should be evaluated by its contribution to development. So the report is about that. So if I was to go back to that framing, so we have the objective of being able to use the findings of this report to work with our member states to strengthen debt governance frameworks so that we have responsible borrowing and also reduction of the debt vulnerabilities. There are those 3 sub-objectives which involved a survey that we did in at least about 6 countries trying to identify the key gaps, the weaknesses when it comes to debt governance within the countries, and also coming up with the practical policy recommendations. So we aim— our value-add is just that link from short-termism to long-term, and we hope that what we found out from the 6 countries that we surveyed, we can actually be able to replicate in other countries as we go.

Thank you.

Dimensions, including strategic alignment, financing needs assessment, all the way to the issue of oversight and monitoring. And there were 29 indicators that we used to assess the technical soundness, the alignment with transparency, resilience. So there were 29 indicators, and then we complemented the findings of this as captured in the Debt Sustainability Index with a survey, a qualitative survey, whereby we went to the 6 countries that you see there, Cameroon all the way to Zambia, and we tried to explain the institutional dynamics that operate in each of those countries. We looked at the formal and informal roles of the key actors in debt management. We looked at where there were overlaps, where there were gaps, whether there was coordination, and this instrument that we used for this qualitative analysis moved all the way from the origination— how do countries originate debt and how do they provide oversight— and then we organized that in 4 thematic areas, from institutional capacity, institutional frameworks, all the way to the political economy of debt. Now, how we arrived at these 6 countries is we just needed some regional diversity, looking at different vulnerability of the countries, their economic size, and also fiscal capacity. But we do hope to be able to use the findings of this work to do this kind of work in other countries. So, what are the key findings? So, the key findings, basically what we found out, and I think it is actually concluded in that statement there, that debt strategies are well aligned with development plans, but weak institutionalization of execution and monitoring leaves the governance cycle incomplete. So we found that in the countries where we did this, we found that there is a lot of strength when it comes to this alignment, good policy direction, alignment with the national development plans, and also articulation of the funding requirements, or at least the macro frameworks are very clear where the debt is required to finance the gap. But as you proceed in the cycle asking now, where are you going to source this resource, this debt, and what type of debt, how are you going to negotiate it, and also the role of parliament and other institutions, be it the auditor generals, all those when it comes now to the issue of oversight and impact assessment, we found there was some weak or moderate in the sample that we had. So that is one of the key findings that— the key finding that we found in this report. So there is work to be done, especially in this— towards the end of the other part of this debt cycle. The second point that we have in the report is the issue of the— we found that there are systemic gaps. In other words, this summarizes what we found in the previous slide that I presented. So you have this institutional fragmentation and weak coordination, which of course leads to the consequences that you see to the right. Where there is weak legal and regulatory foundations, then we found that there were no comprehensive debt laws, there were unclear rules for off-budget expenditures, the treatment of debt that is taken by state-owned enterprises, including the subnational contracting of debt. The issue of oversight, transparency, and accountability did emerge as one of the key issues in some of the countries whereby parliamentary and audit institutions lack capacity and independence, and also there is political interference because of the alignment to the electoral terms. The capacities of debt management offices, and especially when it comes to looking at risk modeling and analytical skills was also found to be wanting, and then the political economy constraints because of the focus of trying to tie the debt to the electoral cycles in some of the countries. Now, so for you to address this, we found that there is a reform paradox in the sense that governments need to professionalize their debt management offices, But at the same time, for you to do those reforms, you need fiscal resources, which they do not have. That is what we are calling the reform paradox. And secondly, you can do as much as you are able to domestically, but unless the global context is also supportive of what you are doing, you may not be able to address the structural issues that we raise in the report with relation to debt. So you have this strong debt governance that cannot overcome the global financial system that today remains, as I stated earlier, creditor-driven, prolonged restructuring disadvantages, and things like that. So in terms of recommendations, very quickly, these recommendations, you can map them to the challenges. At least to the findings that we found, the need for there to be national— we are proposing that it's good to have national debt governance councils, to build capacity for DMOs, to have transparency through creation of debt dashboards that captures the debt from the center all the way to the state-owned enterprises. We also argue that There is need to update the current existing debt governance framework laws, and if possible, in order to untie with the electoral process, we are proposing that we need to have fiscal neutrality clauses and depoliticization of the oversight of the state-owned enterprises and also institutionalization of parliamentary debt review panels. Of course, in the report, we give much more meat into this. And then we need to align national debt strategies with global governance, and this is where we say the domestic reforms are not enough. You need to have the global reforms to be undertaken where we have automatic debt service stance use. I think we heard about that yesterday. and the kind of structural reforms, including the African Borrowers Club that UNCTAD, with the Secretary-General, launched last week in DC, and the other things that Africa has actually been asking in terms of the global financial architecture reform, including in the IFIs. Thank you very much.

Thank you. Thank you so much, Stephen, and I want recap because we have to cover a lot of ground in a short time, and I will now go directly to my good friend, Mr. Patrick Nzana Olomo, the Head of Economic Policy and Sustainable Development at the AUC. If you could try to keep your presentation also as short as possible to allow for us to have discussion. Thank you.

Yes, thank you very much, Jean-Paul, and My dear friend Stephen, thanks for that very eloquent presentation. I'm not presenting anything on the screen, so don't follow the screen, follow me. The first thing I want to say is that we at the African Union have clearly recognized that the moment that we are standing today is a decisive moment. And that it calls for proactive actions to ensure that we are not just theoretical but practical in terms of what we do in support of our member states. That is why we convened the Lomé Declaration— the Lomé Conference that we organized last year from 12th to 14th of May 2025, and we would like to take that opportunity once again to sincerely appreciate the government of Lomé for the very well-coordinated organization of the conference, and that conference offered the opportunity to have what we call the Lomé Declaration that created the space for the drafting of the Common African Position on Debt. And if you look at the institutional processes at the African Union, you will see that we have followed due process engaging with our member states from Lomé to the Specialized Technical Committee on Finance that we had in South Africa, where they formally adopted, endorsed for ministers of finance and central bank governors, they endorsed the Common African Position on Debt. And the political leadership that we have seen expressed since Lomé was clearly articulated when they accepted to also endorse or adopt the Common African Position on Debt at the Assembly level, which is the highest institutional body at the African Union. But what are we talking about clearly? We are talking about a problem that is confronting our countries and that is certainly derailing our development prospects. We have made Excellent shift forward when we look at the development that we have been able to achieve in the last 2 to 3 decades, but unfortunately, with the escalation of the debt, we have started to see a reversing trend that, if actions are not taken, we will never be able to achieve the Sustainable Development Goals and even pretend to to achieve Agenda 2063, our transformative development plan. And in that, we at the African Union, here has— we have clearly taken steps, and I want to build on what Stephen just presented when he concluded by saying that if national efforts or continental efforts are not backed by international support, there is nothing we will be able to achieve. If we still have the current debt architecture that we have all agreed is not operating at the speed, magnitude, and even in the direction that we are all expecting, there is nothing we can expect in the decades ahead of us. So there is need for us absolutely to make sure that we build and operate the debt architecture of the 21st century that responds to the needs of developed or developing economies. That said, when you look at the global dynamics, we have to understand and acknowledge that we have seen some signs of progress here and there, but unfortunately, if we take the case of the Common Framework for debt treatment of the G20, you will see that it is still lacking to respond to the level of expectation that is required in terms of addressing the debt challenge of developing economies. For this, at the continental level, we have taken bold steps. The first was to, as I said, adopt the Common African Position on Debt. Forward to enhance debt management and governance on the continent and ensure that there is macroeconomic policies and frameworks that are supporting our efforts in the direction that we are looking to move forward. I don't want to go deep in the details, but we spoke about data, and in this perspective, we are at the final stages of operationalizing our African Debt Monitoring Mechanism. It is a mechanism that will allow our member states to generate their own data and to make sure that we are not only looking at data that are from external sources. That process is a process that we do believe will allow more transparency and accountability moving forward. We are also in the framework of that debt monitoring mechanism aiming to provide technical assistance and capacity building to our member states and also make some projections about what debt could be and framing scenarios in which countries are going to align themselves to make sure that they address the challenge that we have. The African Union has absolutely welcomed and endorsed the launch of the Borrowers Platform that we made last week. It is a collective effort, and I would like to thank UNCTAD, the formally recognized secretariat for that platform, and look forward to constructive efforts that we're going to deploy to make sure that debt works effectively for development. We are aiming to work with our member states. I can see some of them in the room. I see our very beloved member states, and we do believe that they will join us in this process, because stronger we will be if we are united, as we have always been saying. Africa can only prevail if we come together, and on this debt issue that we are all confronted with, unity should be our main priority. On the continent, we are absolutely mobilized, and the African Union, on the 30th of this month, we are inviting our debt management offices for a meeting in which we will discuss the Borrowers Platform discussed the common African position on debt implementation. Early June, we are organizing a debt dialogue that will bring together all the stakeholders to see what we have achieved since Lomé and how we can accelerate progress forward to enhance Africa's capacities in debt management. With this, Jean-Paul, I don't want to go further and further because there is a lot to say about this, but we remain committed as the African Union Commission to work closely with our member states dealing with this issue that we have said and we are consistently saying is a development trap that we have to avoid. Thank you.

Thank you so much, Patrick, for laying out so clearly. And just one point I will pick is that Africa owning its data is perhaps the first step towards this increased agency, while recognizing, as you have rightly said, that the architectural problems will not solve themselves. It requires a common effort, and this is where our member states particularly will play a key role. And I would like to particularly and thank you for your understanding. Penelope, thank you for presenting. Penelope Hawkins is the Acting Officer in Charge of the Debt and Development Finance Branch and has played a key role in the global conversation on debt, and I know you're also focused in particular on Africa, because if we can't solve Africa, these problems for development will persist.

I really appreciate this opportunity and I really apologize I have to leave this very important conversation. We have been talking about the Borrowers' Platform, as you know, for some time. We know that this is grounded in the Sevilla commitment. I was in a conversation just the other day where the IMF said to me, well, you know, the Borrowers' Platform is okay, they don't have any objection, they just don't understand why it took the borrowers so long. Why do they need the UN? And, well, how do you approach that conversation? Let's have a look at what that kind of thinking has led to in the international financial architecture. I've got a few data here for you. The first thing is just to answer Stephen's question. Stephen was saying, what is happening with investment. And if you have a look at external financial flows, this is for all developing countries, excluding China, you can see the inflows and then the gross capital formation, what is happening here, and you can see external financial inflows is around $1.5 trillion, okay? But we need that amount and the domestic financing to both increase around a third to fill the SDG financing gap. This is for everyone. Let's move on to the next slide. If we then look at how we divide that, we can see that non-resident flows to developing countries, for the— if you look at the last 10 years, you can see that, in fact, just over half are equity instruments, so that's around that— that's the blue area there, and debt instruments accounted for about 45%, with transfers from governments the missing little gap. If you look at the debt side, okay, so that's— what are those? Those are loans and those are the bonds. Now, it's very important if you think about that for all developing countries over that period of time, slightly more than a decade, Why did we choose 2014? Just because that's when data becomes available. What you can see is that this debt side of things, in the end, our analysis shows that it is, in fact, the debt side that wags the tail much more than the equity side. But then we need to bear in mind that since 1990, Africa accounted for only 14% of total bond issuances. 1.4%, and only 17 African countries actually accessed the global markets through bond issuance over this period of time. Let's move to the next slide. And so then it shouldn't be such a surprise when you look at the 3 columns on the far side that although Africa accounts for 38% of the number of developing countries, and 22% of the developing countries' population, they attract 10% of nonresident inflows. Okay, thank you. Next slide. And what is this external finance doing? So first of all, let's just look at the external finance as a share of gross capital formation. If you look at the first 3 bars, You can see that in 2014, for Africa, external finance made up nearly 40% of gross capital formation. Now, in 2014, that is less than a third, just over a quarter, 26%. So external financing contribution has dropped for all developing countries, but of course, for countries like Africa— continents like Africa, it's very serious. Let's move on to the next slide. So, what are we saying about this? First of all, we can see that external financial flows, which do wag— this is the tail that wags the dog. They have been at the heart of these challenges. They affect, although these are external debts, because, of course, so many of them influence public sector borrowing costs, They immediately crimp public and fiscal space. And so we see, if we look at this period of time, 73% of developing countries have had less fiscal space, okay, than they did in 2018 because of this. And what is the problem? The problem is the high cost. I don't have the slide here, but the cost of debt has increased 2.2 times more than the stock of debt. This is not countries gorging on debt. This is the costs that are becoming so expensive. And we know that developing countries in general place twice the cost of the benchmark rates of the US, European countries, and Japan. Africa pays 3 times. that rate. If we look at the 94 countries for which we have data and we say if they could borrow at the same rate as this benchmark for developed countries, they would save $500 billion each year— $500 billion in interest costs. That is millions of schools, millions of clinics. In fact, we've worked it out as something like 1.3 3 million primary healthcare clinics. What can we do? I'm going to speak for one more minute, just to Stephen's very helpful comments earlier. Can we have the next slide? We know that there are both external and domestic factors behind this cost, and I really want to commend what Stephen's done, because he's looking at what is in the national capability. Because we have to start there, and there are certain things that really are key. These are responses designed to increase the attractiveness, the capacity, and the resilience, and to reduce the borrowing costs, and also to address this issue of perceived and real risk, particularly for Africa. But then there are also multilateral cooperative actions, and I think it's here that we would the Borrowers' Platform really counts, because, as our own UNSG has said, in the past, the creditors controlled the purse strings and the conversation. Now, at least the borrowers get a chance at the conversation. I'll leave it there. Thank you so much.

Thank you so much, Penelope, and thank you so much, Ambassadors, for allowing that flexibility. I would now go directly to invite His Excellency, Mr. Issa Konfuru, the Permanent Representative of Mali to the United Nations and Chair of the African Group, who will share with us some perspectives, particularly around the need for this unified approach on debt and on the priorities for Africa. Votre Excellence. Merci.

Thank you. Thank you very much, Mr. Moderator. Excellencies, dear colleagues, I have the honour to speak as the current Chair of the African Group, and I would like first to thank our briefers for the insightful and comprehensive information they shared with us this morning. 3 strong messages. The first one is united we are stronger in Africa. We are conscious of that as leaders, and Africa also is owning now its own data. And third thing, now we have the club of borrowers. So in my view, these are progress we are making, and I would like to add at the outset to underscore that Africa is today speaking with one voice through the Common African Position on Debt adopted by our heads of state and government in February 2026. This represents a historic and unified continental framework to address debt vulnerabilities while addressing sustainable development. The context in which we meet is one of a growing urgency. Across the continent, rising borrowing costs, constrained access to concessional finance, and increasing debt services obligations are significantly narrowing fiscal space. In many of our countries, debt servicing is absorbing resources that are urgently needed for investments in infrastructure, climate resilience, industrialization, and human development. At the same time, the evolving creditor landscape, while expanding access to financing, has also increased complexity and exposed structural shortcomings in the international debt architecture. Moderator, I want to emphasize on a central point. This is not only a question of debt management; it's fundamentally a question of the adequacy, fairness, and effectiveness of international institution and international financial system. Current debt restructuring processes remain too slow, too fragmented, and insufficiently predictable. The absence of effective coordination among all creditors, including private creditors, continues to delay timely resolution and prolong economic uncertainty. In this regard, the Common African Position on Debt set out clear priorities: 1, advancing a more efficient, transparent, and inclusive sovereign debt architecture; 2, Strengthening coordination among all creditors. Enhancing debt transparency and governance. Expanding access to affordable and concessional financing for support to sustainable development. These priorities must be reflected in the ongoing global processes, including the follow-up of the Sevilla Commitment and the broader financing for development agenda. Colleagues, Africa is not calling for exceptions. We are calling for a system that works, a system that is fair, predictable, and responsive to the need of developing countries, a system that enables countries not only to manage debt but also to invest in the future. I thank you.

Thank you. the gaps, and underlining that empowering the borrowers, empowering African countries, is the key to make that link between debt and development, which is currently missing. Thank you so much. Your Excellency, I will now go to His Excellency Mr. Francisco José da Cruz, the Permanent Representative of Angola, who will share with us some of the challenges that African countries have been facing in the context of financing for development with rising debt costs, and how governments can address this debt sustainability while also sustaining investment in infrastructure, industrialization, and social sectors, and recognizing also the role that Angola has played in terms of its presidency of the African Union in the year under which we negotiated Sevilla. So thank you, Your Excellency, for your leadership, and over to you to hear your remarks.

Thank you, Chair, for giving me the floor. Excellencies, distinguished delegates, at the outset, allow me to thank the organizers for convening this timely roundtable on the implementation of the Common African position on debt, and the panelists for their insightful presentation. This discussion comes at a critical moment. For many African countries, debt has become not only a financial tool but also a major constraint. Rising debt service obligations, high borrowing costs, and limited access to affordable financing continue to narrow fiscal space and restrict our ability to invest in sustainable development. The Common African Position on Debt is therefore both timely and necessary. It reflects our shared understanding across the continent that current approaches are not delivering the scale, speed, or predictability required. It also reflects a clear determination to move forward, collectively, towards more effective and sustainable solutions. Excellencies, one of the key challenges we face is the growing complexity of the creditor landscape. While diversification of financing sources has expanded opportunities. It has also made debt restructuring processes longer, more fragmented, and less predictable. In this context, there is a clear need to strengthen coordination across all creditor groups, including private creditors, to ensure more transparent, timely, and inclusive debt restructuring processes. Distinguished delegates, the implementation of the common African position on debt must, therefore, focus on concrete outcomes. This includes advancing reforms in international debt architecture, improving debt transparency, and expanding access to affordable and concessional financing. It also requires strengthening domestic debt management capacity. Capacities and align debt strategies with long-term development priorities. Ultimately, the objective is clear: to ensure that debt supports development rather than constrains it. Angola remains fully committed to working with African partners and the international community to advance the implementation of the African of the common African position on debt. I thank you.

Thank you, Your Excellency. You have pointed out that the link between development and debt is now strained, because debt should support development and not constrain it. We are seeing in all of the indicators how the increase in debt repayment costs is actively constraining that ability. Thank you so much for sharing those remarks with us. We'll now go to Jason to hear perhaps a civil society point of view, and we'll then open the floor for any interventions. And I would like to thank our 2 ambassadors for your continued leadership and also for sharing those perspectives with us. But let's hear from Jason. Over to you. Thank you so much, Ambassador.

Thank you very much, John Paul, and let me thank both Dr. Stephen and Dr. Paul for their very insightful presentations on the status of the Common African Position and the institutional framework therein. From a civil society point of view, first of all, we're very pleased that we have finally reached this position where, you know, the African continent can speak week in solidarity on the issue of debt. With a quarter of the continent's GDP going to servicing external debt, in individual countries spending more than 50% of their domestic revenues on debt servicing, certainly it is now a binding constraint on fiscal space and the development expenditure side. But more importantly, just like the announcement of the establishment of the African Credit Rating Agency, establishment of the African Continental Free Trade Area, the common African position on debt is also a political statement that the African continent is now in a position to speak with one voice, to speak with policy coherence, political coherence, but also prefer solutions on which of the debt relief processes are and aren't working. for the continent. I think certainly the provisions within the Common African Position, particularly those related to climate risks that propose things like debt service pauses, those that talk about immediate debt standstills when countries are going into restructuring, but also similarly on credit ratings in terms of how private finances being able to be accessed by African governments is something that is very welcome and I think can also be the foundations for a more global reform of the debt architecture under the calls for the creation of the UN Framework Convention on Sovereign Debt. I do think that the Common African Position has the capability of doing that. I also want to complement what Dr. Patrick said on One of the, I suppose one may call it an implementing tool for the Common African Position, and this is the African Debt Monitoring Mechanism, which also has been approved at the African Union level and is part of the broader, I guess, debt sovereignty package that the Common African Position offers. I think having a mechanism of this kind is extremely useful for debt management offices to better understand how they are coordinating amongst themselves, how they are collecting the data, but also, more importantly, how they're doing the analysis on how debt management and different debt instruments can be utilized for Africa's development. Very lastly, I do think that the Common African Position, together with the African Debt Monitoring Mechanism, can complement the the wider work that's being done by the African Union Commission and UNECA in trying to ensure that the broader domestic resource mobilization agenda is actually being advanced. The ADMM, if you allow me to use the acronym for it, together, for example, with the illicit financial flows tracker that is being implemented by the African Union that is tracking the recommendations by the High-Level Panel on IFFs, the Mbeki Panel report, If those 2 things can work together, certainly there is a way of managing how we are curbing illicit financial flows and capturing those revenues within the continent, but also how they can complement the— on the debt side, on how those numbers can be adjusted or complemented in that way. I think there is a lot of opportunity on the technical side, on the implementation side, on the governance side, But more importantly, it is the political signaling that this common African position is going to give in the next— in the immediate term, in the medium term, and very happy that the Africa Group here in New York has picked it up. It was mentioned a couple of times yesterday during the member state submissions and the group submissions, and we hope that that sort of approach continues for the rest of this week in this regard. So I think from a civil society point of view, there's a lot to be optimistic for. I do think, like I said in my submission yesterday in the afternoon session, that it is the Africa Group that is leading the charge in setting the rules, both normative, you know, in how global economic governance is being reformed and being challenged.

Thank you.

Thank you very much, Jason, and I did not properly introduce you in the context of your expertise in development and development finance. My apologies for that, formerly with Afrodad, but thank you so much for sharing those perspectives. Dear all, the floor is open for any questions or interventions. Please just raise your hands if you'd like to make a comment or You have a question, Federico? We can start with you. Maybe just introduce yourself. You're from OECD, I know, but—

Thank you. Federico Bonaglia, I am the Deputy Director of the OECD Development Center, and it's a pleasure to be here. Very interesting conversation, and I would like just to make a couple of remarks. First of all, what the Ambassador of Angola said at the end, I think, is the crucial point. Debt for what? I think that when we discuss about debt, we should always ask ourselves, what is the purpose of that debt? And if you go back to the early days of the Debt Sustainability Framework that was conceived a bit in a kind of mechanistic way, we at the OECD Development Centre, where we have a number of developing economists as fully-fledged members, were pointing to the fact that one needs to look at the denominator. I mean, what is the debt that is on the numerator going to do on the denominator? So not every debt is born alike. And so it's important to differentiate the purpose of the debt. If it is debt that is contributing to increase national gross capital formation, generating employment, generating infrastructure spillover, etc., etc., then GDP will also increase, and so the mechanism should be adjusted. But then, if we look at exactly this question of debt for what, together with my brother Patrick, we produce since now 2018 a joint report, the African Union and the OECD. It is called Africa's Development Dynamic, and we ask ourselves the question, what is the biggest challenge Africa is facing? And in our view, the biggest challenge is creating employment for the Young, and this requires transforming economies. And so one should always keep in mind the financing for transformation. So last year we discussed the question of investment infrastructure and how infrastructure can become a driver of transformation. And when you look at the data, we came up with some modeling. We believe that African countries should invest about $155 billion per year until 2040 to diversify their economies and reach a certain level of transformation that is observed in other emerging economies. But then when you look at how much is funded today, African countries invest more or less $83 billion in infrastructure. So you will have almost to double what is currently funded. Where is the funding coming from? Most of the funding is coming from NDBs. Second is government, so it's like 46%, 41%. MDBs and government, or 43%. Only 11% of that funding is coming from private investors. And this is particularly striking because over the last 15 years, the private investment in infrastructure has increased many folds. Africa— African countries only managed to attract 6%, 7% of the global flows of private investment in infrastructure. I think that this leads to the question, and I'm happy that we have here friends that are also looking at that. Why is so little investment going into Africa? When Penélope showed the chart, it is true that external financing as a share of gross capital formation has reduced, but that's not necessarily a bad thing if the domestic financing is going up and if the private financing is going up. Unfortunately, this is not happening, and so we should ask ourselves why investment is not going to Africa on better terms. And this is why we together again with the African Union, have launched this initiative to improve our understanding of investment ecosystems in Africa, the Africa Virtual Investment Platform that was launched at the Africa Union Summit last February 2025. And this is the reason why the next report that we are producing with Patrick and his team is going to look at debt. So it's nice that we will be in touch with you, Stephen, because I think that there is a lot of commonality, but we will be looking at debt for economic transformation. So exactly the question the Ambassador of Angola raised— debt for what? So we believe that it's an important conversation where we at the Development Center of OECD are very proud of being part, together with our brothers and sisters at the African Union. But let me also conclude that there is a need of putting more pressure on the point that was raised on the capacity-building dimension, the capacity-building for the DMOs. I fully agree with you, Stephen. I mean, you need resources to do that, but this cannot be postponed. So I think that every initiative that is launched to increase the capacity building for debt management is very welcome, and we will be— after today, there is an event at the Italian Embassy, if you are willing to join, where we'll be discussing exactly this, initiatives for capacity building for financing for development. Sorry, it was not a question, it was more an intervention, but thank you for the opportunity and keep up the good work.

Interventions are very welcome. So I don't— I would give priority if there are other comments, but— or questions. Yes, sorry, in the back. And after that, I'd like to hear from Steven Babs to react to some of those points. Yes.

Thank you. Chris Kidgeall from the Centre for Disaster Protection. So we work mostly on disaster risk finance, so on working with risk both countries as to how they better prepare and pay for disaster risk. And some of the presentations earlier referenced risk modeling. They talked about disaster pause clauses as a way of pausing existing debt service. I wondered if any of the speakers had reflections, A, on the role that such innovative finance instruments, whether that's in insurance, risk pooling, contingent credit, whatever else— what role those sorts of mechanisms have to play in avoiding taking on new debt as well as managing existing when a shock, and particularly a catastrophic shock, hits a country. And separately and linked to that, in terms of credit ratings, to what extent, while disaster risk is factored in, to what extent, in speakers' experience, the measures taken to manage that disaster risk are or should be factored into those credit ratings.

Thanks.

Thank you. I think that's— allow me to bring— come in with a comment before I perhaps go to Steven, because I'm very interested in the point that you've made. Interestingly, so I've been doing some work in the Office of the Special Advisor on Africa, and in terms of how contingency financing is used. Interestingly, in Africa, the use of contingency financing is not that much higher than, let's say, in the European Union or developed countries. The difference being is that in Africa, that contingency financing, which often is then usually ends up being above what is budgeted. You get a shock like a cyclone or a flood or a drought, and you end up having to spend more, the difference being that in a more developed economy, you may often be able to— if you do need to borrow, you can borrow at very low rates and you can borrow domestically. The challenge for Africa is that it compounds the debt problem, because quite often if you have— you're almost certainly having to borrow, because you have no fiscal space, and then when you are borrowing, you're borrowing at very high cost, often in foreign currency, and then that problem just is compounded.

Whereas—

and this is where perhaps we have this catch-22, because the lack of fiscal space is then further driving countries towards more debt, and I think in the disaster and climate impact-related aspect, we're going to see a worsening of those scenarios. I think that pause clauses— my personal opinion is that pause clauses can play a very important role. They are starting to become more systematically used, but there is— we're hearing complaints about that, that there is a cost to these clauses, and unfortunately, they're trying to put this cost mostly on the borrower, whereas this is perhaps one of the most effective ways that MDBs can help mitigate these costs, and perhaps there's a further role to be explained. I've abused my role of moderator, but I couldn't help myself, so please bear with me. Stephen, maybe you have some reflections in response to Federico's points. I would be interested to hear, if I can add a question, of how the work you've done on the Debt Sustainability Index can help influence or support Africa's response to the issues around debt sustainability analysis, and as well as responding to Federico's point, and if either of you want to respond as well to the comments on the pause clauses. Sorry, was there another hand as well? Peter, maybe let's take your question so we can cover them all.

Over to you.

Just introduce yourself. I do know you as Peter Savblom, but maybe you can introduce yourself so that everyone else—

I am the chairman of the EFORT program, Efficient Fulfillment for Regions in Transition, and also the European Social Label, which is working with COMESA, ACTESA, and the African Development Bank. And one of the issues that we are encountering is the fact that we have to increase the intra-African trade and the debt scenarios related to trade investments. And what would be your comment on sort of how to structure that? Because you have African free trade agreements, there are free trade areas, but the increase in African trade, and specifically in agricultural trade, is quite slow. Thank you.

Stephen, can I start with you? Lots to answer.

Thank you very much, and thank you, colleagues, for the intervention, and also to the 2 ambassadors who are represented here by their staff for their Thank you for that intervention. I think, JP, you answered the question on disaster, and I think you answered it well. What I would want to answer is that question on innovative finance to avoid taking on debt. I think this is something that is gaining currency in the sense that whereas the tax-to-GDP ratio, for instance, in most countries, as you heard yesterday, is quite low, and also because of the— and to change that is not straightforward because of the political economy that comes with that, and also because countries cannot contract more debt, yet they have to provide the kind of investments that are required both in health, education, or even what Federico has said in terms of infrastructure investments. Countries now have to see the opportunities that are presented by innovative financing mechanisms. And that is where this— even the idea of the Africa Financial Architecture is coming in. Those of you who have been following the conversation know that the DFIs in Africa and the AFDB are coming together to form this Africa Association of Multilateral Financial Institutions. so that they can work together for a new African financing architecture, which will include the ability to use innovative financing mechanisms. Some countries have already gone into that, and there is a lot of— I know at least one country which is having to spar with the International Monetary Fund because the securitization process that it is using is actually being considered, rather than being seen as an innovative mechanism, it's actually being seen— the country is being told, can you put this as part of your debt, debt, debt, debt stock? I wanted to say that countries are doing that and also to say that the African Union also formed the Africa Risk Capacity, which I think maybe, JP, you used when you were the Minister for Finance, which also deals with the issue of the disaster risk. Now, what was the last question you asked me before I got cut off?

The question was on the AFCFTA.

Okay, so now I've perverted your question.

My question was the link between— sorry, how do you see your Debt Sustainability Index helping African countries to essentially better respond to the questions raised by DSA?

Yes, actually, that's true. In fact, one of the reasons why we wanted to— we did this index is so that we can demonstrate that if you want to have debt answer the question of development, then the kind of dimensions and indicators and sub-dimensions that we have in the DSI should be the ones that should also be incorporated in the DSA analysis, not a DSA analysis that just focuses on your export earnings and how much those exports can cover on your repayments for interest and debt principal. This index is supposed to strengthen the arm of the African countries when it comes to the negotiations, but we complement that with the institutional mapping and analysis that we did so that you don't just say, but you also say, okay, these are some of the things that we are doing on our part. Peter, on the intra-African trade, before I took on the role that I have today, I worked for 21 years on regional integration. and intra-African trade, and the AfCFTA, we worked on it from day one with the AUC. And we believe that even— there is actually a role of intra-African trade in addressing this question of debt, because when I come back to the point I raised about the low tax mobilization, It's also because the private sector is quite thin. But the minute you start achieving the kind of transformation that we need, the kind of investments that Federico was talking about, taking advantage also of the AFCFTA, then we start broadening our tax base and eventually— The AFCFTA remains the insurance for most of the challenges that we are facing, including the current crisis that we are having on the war that is happening in the Middle East. Now, I'll conclude by saying that there is really— everybody who took the floor actually complimented the the findings that I presented from our report. I think the ideas about data, the ideas about capacity building, all those came across, and I think as a way forward, what we hope to do is, of course, to work in partnership with the African Union Commission on this Common African Debt Position. To also advance some of the empirical work that we did in the 6 countries to other African countries, so at least even as they talk about the common African position on debt, they do it with empirical evidence. So the meetings, the workshops that Patrick and his team will be having, I think what we will seek is actually just sort of an endorsement of these findings and how we can scale them up in other other African countries. Let me stop there so that at least Patrick can also have an opportunity to say something. If I did not respond to something that you wanted me to respond, JP, maybe it's because I have not taken coffee this morning.

You covered everything. I think we can— part of Peter's question was a little bit more specific on agriculture, but I propose we take this in bilateral. You covered it through the FCFTA in a general sense. I'll go to Patrick Pabst. if you can also cover some of those comments and if you have any final closing thoughts.

Thank you very much, and I would like to take the opportunity on behalf of the African Union to sincerely appreciate the member states and also the comments that came from the floor. I want to start with the AFCFTA, a very important comment and question because for us, the African Continental Free Trade Area is Africa's response to the challenges that we see globally, but also to address some of the structural weaknesses that we have on the continent. When you look at the continental integration agenda, you will see that it is part of the steps that we are following because there are 6 priority steps that are emanating from the Abuja Treaty, and the AFCFTA is certainly at the center of those steps because further steps are including the custom union and Also moving towards financial integration, in which we are already working, because under the leadership of Her Excellency the Commissioner, we are aiming to operationalize the African Monetary Institute just in a few months, because in September, according to the heads of state recent decision, we are supposed to implement it. The statutes are ready and all the institutional frameworks are already in place. Having said that, though, there is a fundamental need for us to address the debt challenge that we are seeing. How can we achieve the objectives and imperative of the AFCFTA if two-thirds of the resources are evaporating for debt service alone. So that is why the call that we are formulating is a call that goes beyond, you know, the normal parameters. We are not begging for any kind of support that is beyond what is acceptable. We are just looking at acceptable terms that are applied to everyone, and in that equity and responsive international environment that we're looking for, we are saying that should we have the same terms of debt and the terms of payments, and I think Penelope from UNCTAD clearly outlined the differences that we see in the treatments that African countries are having in that regard. And our research have also underlined the fact that there is a high cost of capital that the African continent is facing. The premium that we are paying is above all and is suffocating our countries that cannot even invest massively in infrastructure, in education, and in health services that are required to support structural transformation. That is what we're saying. We are not begging for any kind of support that is not provided to all other regions. So when you look at the AfCFTA, And I take you back to the 1980s when we had the Lagos Plan of Action. It is clearly written that should Africa fail to increase its productive capacity, we will not be able to take advantage of our market.

Yes.

Today we have a size of 1.4 billion people, and the research and the data that we are now producing are clearly showing that the continent will be 2.7, 2.8 billion people in 2 decades, which means that we will be the youngest continent in the world, that we are already the youngest continent in the world. The workforce of tomorrow will be in Africa, and all the ingredients in that region, and you spoke about agriculture, we have 60%, 65% of arable lands. What is required today is to see investment flowing in those sectors, and I think our leaders have already expressed their willingness of creating the space for an agricultural— I don't want to say revolution, but that is what I will say. My English is not very good. An agricultural revolution that is at the center of the global transformation in this space, and we have the capacity, we have the opportunity, we have the willingness. The only thing that is remaining is the financing for that. How can we attract investments in agriculture when you have a premium of, you know, the international investor community that is, you know, absolutely wrong about the continent, perceiving it as one of the most, you know, one of the most riskier continents in the world. But when you look at data, you will see that— and I'm saying data that we are not producing, because we are not producing that data— are showing that Africa is the less riskier continent in the world and that even the investment returns are the highest compared to all the regions, but how do we finish with a continent where investments is not flowing? That is why even with the OECD, we are working to operationalize what we call the Africa Virtual Investment Platform that is aiming to provide a comprehensive digital platform aiming to indicate the level of risk on the continent, to exhibit the opportunities, and to show that countries have already been doing their part in terms of providing the space, the regulations for attracting investment. That is what we're doing. I can go on and on, but just to say that Africa is ready to move forward in its structural transformation. The only thing that we are in need today is to see investors understanding that we are ready and that we are willing to work in the way that will support Africa's structural transformation. The African Union is playing its part. We have created the space for all, and even on investments, as I said, we have the Africa Virtual Investment Platform. We have the Common African Position on Debt and various institutional processes that are pushing us to that. So thank you very much, Jean-Paul, and I really believe that this moment is no longer a moment of discussions because we have discussed already, we have said it all. Now time has come for us to move towards strategic actions and to make sure that we walk the talk for development. Thank you.

Thank you very much. I think Patrick has— I'm sorry, Peter, we have to close because— I suggest we follow up, we can have a chat immediately after. And I, just as the moderator, I would just like to thank everyone. My role is really just to appreciate all of the speakers. The conveners, the United Nations Economic Commission for Africa and the African Union Commission, the member states— in particular, we've heard from Mali and from Angola, who have highlighted how the unity of leadership of Africa is strong on this issue— as well as UNCTAD for their technical expertise. Just a couple of quick points to summarize. The Common African Position on Debt underlines the unity of purpose for African countries. Secondly, the debt issues that we are facing are actually development issues, and they are an issue of structural transformation. Addressing structural transformation will address the problem of debt, and therefore it means looking at actions across the financing— the financial cycle and addressing these at an institutional level, domestically are obviously important, as well with an enabling regional environment and continental frameworks that are evolving very fast. Patrick mentioned the forthcoming African Monetary Institute. But thirdly, that this needs an enabling global environment. That's the hardest part. It's the part that perhaps is not moving as fast as we would wish, but with the determination of action, we can achieve that. I would like to just thank everyone and conclude on that note. Thank you very much.

Thank you.