Egyptian Finance Minister Mohamed Maeet reviewed Egypt’s initiative ‘Alliance of Sustainable Debts’ at the 55th Conference of African Ministers of Finance, Planning and Economic Development (COM2023), Addis Ababa.
The minister invited African countries and financial institutions to join the alliance in a bid to bolster co-operation and establish a joint framework for regulating sustainable debt transaction.
“This should be conducted in a manner likely to offer an opportunity to unify international efforts to achieve ecological progress and free financial space for developing countries without disrupting the global financial market,” the minister said.
Maeet spoke of the need to turn the developing world’s debt burden into sustainable solutions for green recovery.
“Debt affects the priorities of development and reduces capital for investment in climate action,” Maeet said, adding that harsh financial conditions in emerging markets impede climate action and development.
The minister called for consultations to make debt “part of the solution” by encouraging more sustainable investment in green projects.
“Taking the necessary measures and initiatives to counter climate change has become vital to curb poverty and promote prosperity in a sustainable manner,” he said, pointing out that this could be realised if African countries obtain affordable, low-cost finance, while mobilising more green investment.
In 2010, the African governments spent an average of less than 5 per cent of their revenues on foreign debt servicing, rising to 16.5 per cent in 2021, he said.
“African countries will therefore be unable to invest sufficiently in climate solutions unless a significant rise in concessional financing is conducted, taking into account that Africa contributes least to climate change and is most vulnerable to it,” the minister said.
He called for reforming the world’s financial structure what has become unsuitable, mainly for the developing countries.
Maeet also called for global rating agencies to be fairer in their assessments, especially for the African countries, considering the repercussions of the coronavirus pandemic and the war in Ukraine.
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