Africa is owed US$36 trillion in climate debt by rich polluting countries, a new report by ActionAid shows

BY STEVE EPHRAEM

RICH polluting countries owe low and lower-middle-income countries US$107 trillion in climate debt, a new report by ActionAid reveals. This is more than 70 times greater than the total foreign debt of US$ 1.45 trillion that lower-income countries collectively owe.

The report, titled “Who Owes Who? External debts, climate debts and reparations in the Jubilee year,” highlights the unfair global credit rating system that drives the debt crisis in most African countries. Africa is charged extortionate interest rates on loans, averaging 9.8%, yet the polluting countries are not paying no interest to Africa when they fail to honour climate finance commitment.

This report by ActionAid should be a wake-up call for heads of African countries as they go to the African Union Summit next week. It should make them think decisively and map a way forward when they put into consideration that over three quarters of all lower-income countries are spending more on foreign debt than on their own health care systems and more than half of them are spending more on debt servicing than education.

Meanwhile, rich countries are not paying the climate debt of at least US$36 trillion that they owe to Africa – let alone other debts for reparations, failed promises, and ongoing economic exploitation.

 

 “It is a travesty that African nations are being crushed under the weight of foreign debt, while the world’s richest countries continue to look the other way, evading their responsibility to pay for the climate crisis and reparations related to the slave trade and unfair economic practices.

By forcing countries to prioritise debt repayment over essential services such as health and education, or responding to the runaway climate crisis, the rich countries are pushing Africa to the brink,” said Arthur Larok, the Secretary General of ActionAid International.

 On the other hand, the data in the report shows that rich countries should be paying Africa twenty-five times more, at least US$ 1.4 trillion every year in climate finance.

Chikumbutso Ngosi, the Young Urban Women Programme Manager at ActionAid International said, “Servicing external debts, and complying with conditions attached to IMF loans, is undermining spending on health, education, and climate action, particularly impacting women and girls. But rich countries get away without paying their debts to Africa. How is that fair?”

 The African Union’s declaration is that 2025 is the Year of Reparations and presents an opportunity to stand up to both historical injustices and the continuing injustices that arise from the colonial international financial architecture.

“The reality is that for African countries to overcome the debt crisis and the impacts of climate change there must be debt cancellation and a complete move away from colonial debt architecture that has burdened the continent for decades.

 “In this year of reparations, the African Union must ensure both debt cancellation and a new United Nations Framework Convention on Debt are agreed,” said Andrew Mamedu, the Executive Director of ActionAid Nigeria.

The report shows how 2025 presents a real opportunity to align the international financial system to the challenges faced by low and lower-middle-income countries.

 “In this Jubilee year, we need a fundamental overhaul of the global financial architecture, shifting the power over debt away from the IMF to a more representative and inclusive UN body,” said Joy Mabenge, the Country Director of ActionAid Zimbabwe

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