Global Finance System Needs Reforming to Address Africa's Inequities & Historical Injustices: UNECA

The current global financial system is outdated, inequitable, and unjust, necessitating urgent reforms to address the inequities and historical injustices faced by African nations, Executive Secretary of the UN Economic Commission for Africa (UNECA) Claver Gatete stated.

"The current global financial architecture is outdated, inequitable, and unjust and must be reformed to be fit for purpose. […] A just world requires governance reforms in international financial institutions to ensure that Africa has a stronger voice in shaping global economic policies," he said, addressing the African Union Executive Council session on the sidelines of the upcoming 38th AU Summit.

Among the key priorities, the official emphasized that debt restructuring is essential to enable African countries to prioritize development and investment over high interest payments, while the establishment of an African-led credit rating agency is needed to ensure fair assessments of the continent's economic potential.

"We must advocate for debt restructuring that allows African nations to invest in their people and development instead of paying exorbitant interest rates. [...] Also, it is imperative to establish an African-led credit rating agency to ensure fair assessments reflect Africa’s true economic realities rather than outdated risk perceptions," he explained.

The legacy of the transatlantic slave trade and colonial exploitation continues to manifest in modern inequalities within global financial systems, trade structures, and governance institutions, the executive secretary also said.

"We cannot contest the fact that the transatlantic slave trade and colonial exploitation robbed Africa of its people, resources, and dignity, and left behind inequalities that persist in global financial systems, trade structures, and governance institutions, till this day," Gatete noted.

These historical injustices have led to resource extraction without development, undervaluation of African economies, and systemic barriers to trade and investment, according to the speaker.

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However, reparative justice must go beyond financial compensation to address these enduring disparities, he stressed.

Despite Africa's vast natural resources—30% of the world's mineral reserves, 40% of its gold, 65% of its arable land, and significant deposits of chrome and platinum—the continent remains marginalized in global trade and manufacturing. In 2023, intra-African trade was only 16%, compared to 68% for intra-European trade, highlighting the stark inequalities Africa faces in the global economy, the UNECA chief said.