Africa is intensifying its calls for reforms to the global financial system, arguing that the current standards for accessing international concessional finance and building competitive financial institutions remain under the control of outdated frameworks that disadvantage the continent.
During the African Union Commission’s 7th Mid-Year Coordination Meeting held in Malabo, AU Commission Chairperson Mahmoud Ali Youssouf noted that Europe is adapting to a new global reality. His statement reflects a growing sentiment among African leaders that the financial system dominated by Western countries is no longer fit for purpose and is increasingly being challenged.
This past week, both global and continental summits highlighted the determination of the Global South particularly Africa to push for financial system reforms. Leaders from the African Union Commission and the United Nations Economic Commission for Africa (UNECA), speaking at separate meetings, made it clear that the existing global financial architecture cannot be seen as a genuine partner in ending poverty unless it is fundamentally reformed.
The BRICS bloc, during its most recent summit, also emphasized the urgency of either reforming current institutions or establishing alternative structures to counterbalance the dominance of Western-led financial entities.
“As the Global South positions itself at the center of a changing world, Africa is redefining its path toward financial sovereignty moving away from its historic dependence on international aid,” said the AUC Chairperson.
Criticism of the current system goes beyond its debt and credit frameworks. African leaders argue that the structure actively hinders the continent’s ability to access its fair share of global development opportunities.
UNECA Executive Secretary Claver Gatete pointed out that only two African countries are currently rated as investment grade, despite the continent having a strong pipeline of viable projects in energy, transport, agriculture, and digital infrastructure. “We are not proposing another list of projects,” he said. “We are proposing a coordinated, African-led mechanism to shift capital to where it is most needed.”
“For Africa, this is not a theoretical issue. It is about survival, transformation, and asserting sovereignty over our development path,” Claver asserted.
The Seville Commitment, a 38-page outcome document adopted at the Finance for Development Summit in Seville, Spain, echoed these concerns. It outlines voluntary steps by world leaders to improve the financial system, especially in terms of supporting investments in developing countries. The document makes clear that reform is not optional.
A press release from UNECA sent to The Ethiopian Herald emphasized Africa’s key priorities: debt relief, access to concessional finance, climate funding, and mobilization of private capital.
UNECA Deputy Executive Secretary Hanan Morsy also stressed, during the UN’s Finance for Sustainable Development meeting, the importance of designing new financial instruments that reflect the lived realities of African nations.
To meet the Sustainable Development Goals (SDGs), Africa needs an estimated 1.3 trillion USD annually. However, high borrowing costs, limited access to concessional financing, and risk-averse investment patterns continue to hamper progress not only on the SDGs but also on the African Continental Free Trade Area (AfCFTA) and Agenda 2063.
“Africa does not lack investable projects. It lacks capital,” Claver said. “Outdated risk models and biased credit ratings continue to divert capital away from the continent, despite ongoing reforms and emerging opportunities.”
“As the Global South positions itself at the center of a changing world, Africa is redefining its path toward financial sovereignty moving away from its historic dependence on international aid,” said the AUC Chairperson.
Criticism of the current system goes beyond its debt and credit frameworks. African leaders argue that the structure actively hinders the continent’s ability to access its fair share of global development opportunities.
UNECA Executive Secretary Claver Gatete pointed out that only two African countries are currently rated as investment grade, despite the continent having a strong pipeline of viable projects in energy, transport, agriculture, and digital infrastructure. “We are not proposing another list of projects,” he said. “We are proposing a coordinated, African-led mechanism to shift capital to where it is most needed.”
“For Africa, this is not a theoretical issue. It is about survival, transformation, and asserting sovereignty over our development path,” Claver asserted.
The Seville Commitment, a 38-page outcome document adopted at the Finance for Development Summit in Seville, Spain, echoed these concerns. It outlines voluntary steps by world leaders to improve the financial system, especially in terms of supporting investments in developing countries. The document makes clear that reform is not optional.
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A press release from UNECA sent to The Ethiopian Herald emphasized Africa’s key priorities: debt relief, access to concessional finance, climate funding, and mobilization of private capital.
UNECA Deputy Executive Secretary Hanan Morsy also stressed, during the UN’s Finance for Sustainable Development meeting, the importance of designing new financial instruments that reflect the lived realities of African nations.
To meet the Sustainable Development Goals (SDGs), Africa needs an estimated 1.3 trillion USD annually. However, high borrowing costs, limited access to concessional financing, and risk-averse investment patterns continue to hamper progress not only on the SDGs but also on the African Continental Free Trade Area (AfCFTA) and Agenda 2063.
“Africa does not lack investable projects. It lacks capital,” Claver said. “Outdated risk models and biased credit ratings continue to divert capital away from the continent, despite ongoing reforms and emerging opportunities.”