Cape Town: Eight former African Heads of State and Government have signed the Cape Town Declaration, calling for the critical need for debt relief for highly indebted nations and advocating for lower borrowing costs for all developing countries. The Declaration was signed at the launch of the African Leaders Debt Relief Initiative (ALDRI), which reflects the leaders’ commitment to rallying for a comprehensive debt relief strategy for countries in dire financial situations.
According to Ethiopian News Agency, the debt crisis has been exacerbated by rising interest rates and a stronger dollar, making it increasingly difficult for African countries to manage dollar-denominated debt. Jakaya Mrisho Kikwete, Former President of Tanzania, emphasized the global necessity of resolving this crisis for the benefit of economies worldwide. The launch of the initiative coincided with the first G20 Finance Ministers’ meeting in Cape Town, where debt sustainability is a central focus of the South African G20 Presidency. The
Declaration aligns with the African Union’s Agenda 2063, highlighting the continent’s long-term development goals.
The African Leaders Initiative on Debt Relief is spearheaded by a group of distinguished former African leaders, including Hailemariam Desalegn of Ethiopia, Olusegun Obasanjo of Nigeria, Joyce Banda of Malawi, Jakaya Mrisho Kikwete of Tanzania, and Dr. Ameenah Gurib-Fakim of Mauritius. The initiative also includes Macky Sall of Senegal, Nana Addo Dankwa Akufo-Addo of Ghana, and Yemi Osinbajo, Former Vice President of Nigeria.
Yemi Osinbajo highlighted the dire financial predicament, noting that more than half of African countries allocate more funds to interest payments than to healthcare, severely limiting their ability to invest in sustainable development. He stressed the importance of reaching a breakthrough during the G20 meetings, pointing to South Africa’s G20 presidency as a crucial opportunity for a unified stance on debt relief.
The signatories called for enhanced international cooper
ation to tackle the debt crisis and stressed the need for reforming the global financial architecture to better support developing countries. Olusegun Obasanjo, Former President of Nigeria, remarked on Africa’s unsustainable debt burdens and underscored the need for a collective solution to drive sustainable economic development.
In 2023, low- and middle-income countries collectively spent $1.4 trillion servicing foreign debt, with $406 billion in interest payments. The Cape Town Declaration is seen as a timely opportunity to focus on Africa’s debt crisis and other challenges faced by developing nations, including health, education, food and energy insecurity, and environmental issues.
The African Leaders Debt Relief Initiative continues to advocate for policies promoting economic resilience and sustainable growth across Africa. The signatories remain committed to collaborating with international stakeholders to implement these crucial reforms, advancing Africa’s development agenda.