Africa is being crippled by costly loans and unfair interest rates, campaigners in Nairobi warned at a key summit this week as they demanded a rebalance of global financing.
"Africa is at a very crucial moment of its development," said Desire Assogbavi, of the ONE campaign, a global NGO dedicated to fighting poverty and inequality.
Assogbavi was in Nairobi for the annual meeting of the African Development Bank (AfDB), which estimates the continent's average economic growth in 2023 fell to 3.1 percent – down from 4.1 percent the year before.
High food and energy prices were contributing factors, as were political instability and climate shocks. Despite this Africa's bank, which turns 60 this year, expects growth to starting picking up from 2024.
Campaigners like Assogbavi say that in order for this to happen, lending structures need to be updated so that African economies have access to less costly investment and loans.
Lending bodies such as the World Bank and the International Monetary fund were created 80 years ago, with the post-WWII Bretton Woods agreement, at a time when "most African countries did not even exist", he told RFI.
The AfDB, created in 1963, and its Africa Development Fund, operational since 1974, are seen as more understanding of the needs of African economies.
"The continent should tape on all options to finance its development, including the AfDB’s fund," Assogbavi added.
The ONE campaign is calling for that fund to be replenished to the tune of "at least 25 billion dollars".
Mounting debt
The week-long AfDB annual meeting, whose theme this year is "Transform Africa", could influence global economic policies for the coming years, if not more.
There is an urgent need for reforms to the "unjust" global financial system, which African leaders say penalises African nations with high borrowing rates.
Governments across the continent need vast financial resources, Kenya's President William Ruto said at the summit.
"We face the rigid barrier of a global financial architecture that is fundamentally misaligned with our aspirations," Ruto said.
Ruto complained that African countries are forced to borrow on capital markets at rates far above those paid by the rest of the world, "often up to eight to 10 times more".
African countries battle sometimes crippling levels of debt to fund their development, as well as frequently unstable exchange rates.
Reform from within
Meanwhile demands for a fairer global economic and financial system are coupled with a drive to transform the AfDB itself.
"Decisions are very positive so far," Assogbavi told RFI, noting various encouraging finance collaborations for the development world.
"The new strategy of the bank has been unveiled ... and we've seen the priorities within that strategy match very well with the most pressing need of the continents."
African countries have to push for their most pressing needs to be met, Assogbavi added. First off is a stronger agricultural sector, and second is the industrialisation of agricultural businesses.
The AfDB predicts the continent's overall economy will expand by 3.7 percent this year.
