African Development Bank (AfDB) President Akinwumi Adesina, took the stage in Paris at the recent Summit for a New Global Financial Pact, voicing his concerns about rich countries’ failure to honour their financial commitments to Africa, some of which date back to 2009.
Addressing the audience on Wednesday, Adesina highlighted the significant economic losses Africa faces due to climate change. ‘Africa alone loses $7 to $15bn a year because of climate change, and that’s going to rise to about almost $50bn a year by 2040,’ he stated. He stressed the need for developed countries to meet their commitment of providing $100bn to combat climate change. Adesina underlined the importance of fulfilling these financial obligations, explaining that the failure to do so creates a crisis of trust in developing countries.
French President Emmanuel Macron hosted the summit, which gathered over 50 heads of state, along with world finance officials and activists. The primary objective of the two-day summit was to seek improved responses to address poverty and the climate crisis by reshaping the global financial system.
Developing nations have long criticised the current system, where the United States, Europe, and other major economies, which have contributed most to climate damage, remain their main creditors. This arrangement leaves the poorest countries to bear the consequences of the climate crisis.
Although the summit did not possess the mandate to make formal decisions, organisers stressed its aim to provide political impetus to key issues to be discussed in upcoming international talks, including climate conferences.
Adesina remarked, ‘I don’t think you’re going to have a lot of new announcements made. I think the issues that announcement that needs to be made have been made.’ He emphasised the importance of commitment and finding ways to engage the private sector, considering the vast assets under institutional investors’ management, projected to reach $145 trillion by 2026.
Numerous activists and non-governmental organisations called on participants at the climate and finance summit, which concluded on Friday, to ensure that rich countries commit to debt relief for poor nations, including loan cancellations. Discussions also touched upon the inclusion of a debt suspension clause for countries affected by extreme climatic events.
The first day of the summit witnessed the announcement of two significant deals. French officials disclosed that debt-burdened Zambia had reached an agreement with several creditors, including China, to restructure $6.3bn in loans. Additionally, Senegal struck a deal with the European Union and western allies to support its efforts in enhancing energy access and increasing the share of renewable energy to 40 percent by 2030.
