The African Regional Organisation of the International Trade Union Confederation (ITUC-Africa) has called on governments across the continent, official and private creditors, including the World Bank and IMF, to swiftly prioritise and execute the restructuring of Africa’s debt.
ITUC-Africa said the event in Zambia has compelled its leadership to make the call and to request that the Zambian case be given urgent attention. “Urgent public debt treatment is vital for protecting Zambian citizens’ fundamental human rights and well-being,” the trade union confederation, added.
In a statement by its General Secretary, Akhator Joel Odigie, ITUC-Africa said Zambia, like many African countries, grapples with a constricting web of debt that significantly limits its fiscal flexibility. Also, it said extensive research spanning various African countries, including Zambia, underscores the correlation between mounting debt and escalating inequality.
The research, according to the statement, established that the burden of unsustainable debt severely hampers the government’s capacity to allocate funds to essential sectors like infrastructure, health and education while inhibiting the implementation of vital social protection measures.
“Consequently, revenues earmarked for crucial social services that should support lower-income groups are diverted towards servicing debt, resulting in a detrimental impact on pivotal areas such as healthcare and education. This, in turn, leaves a void that directly affects the working class, who disproportionately bear the consequences of diminished access to quality healthcare and education.
“Amidst formidable global economic challenges and the repercussions of dynamic shocks on African economies, ITUC-Africa emphasises the urgent need for a prompt restructuring of public debt in African economies, including Zambia. This strategic approach is vital to safeguard African citizens, families and communities’ human rights and overall well-being.
“While Zambia and other African economies have demonstrated some forms of resilience to cope with and navigate a complex post-COVID recovery, contending with the challenges posed by tightening global financial conditions, geopolitical tensions and ongoing climatic threats, concerns persist regarding the potential impact of debt distress on people’s socioeconomic rights. Despite growth challenges, there is optimism that Africa’s resilience will improve, underlined by the projected rebound in growth to 4.3 percent in 2024.
“However, persistent risks such as debt distress, inflation and climate change underscore the necessity for proactive measures. These challenges have contributed to debt default in some African economies, including Zambia, with indications that others may follow suit,” the statement added.
The union further emphasised the need to finalise the debt treatment promptly under the G20 Common Framework. As observed in Zambia, delays in restructuring have severe consequences on the economy, leading to high inflation and a high cost of living.
It further calls for an improved G20 Common Framework, emphasising the need for consensus between official and private creditors to ensure fair and equitable debt treatment. The lack of consensus, as evident in Zambia’s situation, negatively impacts its citizens.
Additionally, ITUC-Africa urges the IMF to consider reforms that prioritise human-centric fiscal management. These reforms aim to mitigate the adverse effects of debt distress on workers and the general citizenry.
The union also called for amicable debt servicing and repayment arrangements that do not compromise debtor countries’ abilities to address poverty and inequality, including exploring options for debt forgiveness.
The statement further said, “ITUC-Africa acknowledges the significant efforts made by the Zambian government, including the enactment of the Public Debt Management Act and the recent agreement with the Official Creditor Committee (OCC).
“However, the organisation recommends the establishment of a dedicated Public Debt Management Office. This office would enhance oversight, transparency and accountability, reinforcing the positive steps taken with enacting the Public Debt Management Act.
“ITUC-Africa emphasises the urgent need for collaborative efforts from all stakeholders to address the looming threat of debt distress in Africa, especially in the Zambian case. The call for debt restructuring aims to secure economic stability and protect the socioeconomic rights of Zambians and Africans.
“ITUC-Africa underscores the need for a paradigm shift in debt contracting, urging for transparency, improved debt management, accountability and the active involvement of non-state actors. By adhering to these tenets, committing to responsible borrowing practices and equitable, efficient and inclusive debt management, African countries can utilise debt to achieve sustainable, inclusive and shared development.”
