Dalaya Ashenafi Esayiyas[1]

As global elites gather in Spain for the Fourth International Conference on Financing for Development (FFD4) starting from tomorrow 30 June, their exists no indication that this forum will not once again peddle the same old myths: that more loans, ‘sustainable’ debt frameworks, and technocratic tinkering can ‘fix’ Africa’s financial crisis, characterised by cyclical heavy indebtedness. But after decades of empty promises, the trend is clear: the current system is not broken, it is working exactly as designed. From Zambia’s vulture fund lawsuits to Ghana’s IMF-mandated hunger riots, the models of Africa’s access to ‘development finance’ remain a neocolonial project of extraction, enforced through spreadsheets and austerity. If FFD4 refuses to confront this reality, it will be just another stage for the financial empire’s theatre of hypocrisy.

The Illusion of Reform, Restructuring and ‘Development Finance’

On 20 June 2025, a distinguished commission of global experts convened by the Pontifical Academy of Social Sciences and Columbia University’s Initiative for Policy Dialogue issued a damning indictment of the global financial system. Their report’s bold recommendations, designed to unshackle developing nations from debt traps and fast-track equitable development, would be ideal for a system that had lost its way and sought reform through dialogue. Another similarly groundbreaking report of the World Inequality Database, released on 9 June 2025, proposed structural reforms of the international monetary and exchange system, focusing, among others, on a centralised system of credits/debts with a common borrowing rate.

But the global financial system operates exactly as intended: as a rigged game that extracts wealth from the Global South while offering false solutions. The two reports’ urgent call for systemic change only underscores how profoundly the current architecture serves creditors, based exclusively on a profit logic, over people, inducing recurrent ‘crises’ and turning ‘crisis management’ into permanent control.

In 2023, Zambia spent more on debt payments to creditors, including British bankers, than on healthcare for its 20 million citizens. Take, as another example, the pressure exerted on Zambia and Ghana to default on loans from the African Export-Import Bank (Afreximbank) and the Trade and Development Bank (TDB) by insisting that these banks should not enjoy preferred creditor status of multilateral financial institutions and undermining the banks’ credit ratings and increase their borrowing costs with dire consequences for African states.

These are not anomalies; they show the neocolonial financial order working exactly as designed.  For all the talk of ‘development finance’ and ‘debt relief,’ the brutal truth remains: Africa is caught in a debt trap engineered by the same powers that once colonised it through armies and now do so through spreadsheets.

African nations borrow not for development but to service old debts, stabilise currencies looted by capital flight, and pay for imports made necessary by trade imbalances enforced by the inequitable global financial and trading system.  In 2023, Ghana took $3B IMF bailout to stabilise its economy. The reality was that the bailout came with painful cuts. VAT hikes on electricity, fuel subsidy cuts (sparking 54% inflation), and deepening trade Imbalance. The outcome has been citizens paying exponentially more for basic goods while gold revenues (controlled by Newmont Mining) bypass state coffers.

As the global financial system operates like a rigged casino benefiting the powerful, the odds are stacked against the Global South. Despite decades of promises, debt ‘relief’ initiatives, and technocratic tinkering, Africa is never relieved. It remains trapped in a neocolonial cycle of extraction, austerity, and dependency. The latest proposals, debt sustainability analyses (DSAs), Special Drawing Rights (SDR) recycling, and local currency lending, are presented as solutions, but they are little more than band-aids on a bullet wound.

This is not a crisis of bad policy; it is the logical outcome of a financial empire designed to enable those who designed it to develop, while keeping parts of the world like Africa at the bottom of the development pyramid. From the IMF’s structural adjustment programs (SAPs) of the 1980s to today’s ‘debt transparency’ frameworks, the game remains the same: extract wealth, enforce obedience, and maintain control while offering ‘solutions’ for making the symptom of the illness tolerable.

The IMF’s Austerity Trap

Debt Sustainability Assessments (DSAs) often tend to be little connected to the economic realities. Like an outdated map, they often fail to account for the actual terrain of a country’s fiscal challenges and growth potential. The IMF claims DSAs will prevent ‘unsustainable’ borrowing, but who defines what is ‘sustainable’? The same institution that forced Ghana to slash fuel subsidies in 2023, sparking riots?

The IMF’s austerity conditionality constitutes structural violence through fiscal policy, undermining the pledges made under the United Nations’ Sustainable Development Goals (SDGs). By mandating wage cuts, healthcare privatisation, and labour deregulation in debtor nations, these programs institutionalise poverty, divert the little resources of poor countries away from meeting the survival needs of citizens to servicing debt.

This is directly associated with the outdated power dispensation that structured the design and operation of the IMF and the World Bank. First, we have voting shares at the World Bank that still reflect 1945 power dynamics, whereby nearly 95% of African states hold less than 5% while the countries that designed the system, like the US, hold more than three times more. Second, local currency lending is a distraction when the system is hardwired for dollar dependency, and Africa loses more to illicit financial flows, capital flight ($88.6B/year, UNECA) than it receives in aid. Third, private creditors who hold a significant amount of the south’s debt and vulture funds operate to entrench extractivism. After defaulting on its debt, Zambia was sued by British Virgin Islands-based vulture funds demanding 300% returns.  The IMF’s ‘restructuring’ deal protected bondholders while Zambians faced fuel queues and medicine shortages.

Despite its years of demand for reform, the reality is that Africa, left with no other choice, continues to engage. Highlighting its unwillingness to relinquish its dominance willingly, the financial empire persists to deflect responsibility and block necessary changes. If Seville is to mark a break from the continuation of the status quo, it must allow the replacement of the system, as the WID report and many others argued, by ‘a more inclusive and mutually beneficial trade and monetary system.’

The Missing Alternatives

There are development advancing alternatives ranging from the cancellation of Illegitimate debts to pegged exchange rates closer to purchasing power parities and/or a common currency and a centralised system of credits/debts with a common borrowing rate.

Most African debt is odious, often borrowed on extortionist terms, including via IMF conditionalities. African countries can demand an independent audit (like Ecuador did in 2007) and repudiate predatory loans.

Also missing is ‘a credible, comprehensive mechanism for sovereign debt relief,’ which is also called for by the Vatican-Columbia University sponsored Commission.

Additionally, there will be no meaningful benefit to be gained from making concessions on the African Group’s position for the FfD4 calling for the establishment of a time-bound global sovereign debt authority, echoing the Report of the Namibia-Amani Africa High-Level Panel of Experts on Africa and the Reform of the Multilateral System.

Africa also needs to be serious about continental financial and monetary integration to ensure financial sovereignty. It is time to think about regional currencies and implement the pan-African payment and settlement platform. Capital controls need to be implemented to fight illicit financial flows.

Unless Seville marks a complete break from the past and ushers in firm commitment on the overhaling of the global financial architecture, there is little prospect that the tinkering on the margins and committing to future reform of the international financial institutions would be enough to ending the cycle of heavy indebtedness and extortionist terms of access to development finance and to meet the development needs, including the realisation of the SDGs.

 

[1] Dalaya Ashenafi is  an Ethiopian political economist and strategist whose work critically engages with structural inequality, state power, and emancipatory development alternatives. She can be reached at [email protected]

Said Djinnit*, Ibrahim Assane Mayaki** and El-Ghassim Wane***

In July 1990, nearly thirty-five years ago, Salim Ahmed Salim, then Secretary-General of the Organization of African Unity (OAU), presented a landmark report to the 52nd Ordinary Session of the OAU Council of Ministers entitled ‘The Fundamental Changes Taking Place in the World and Their Consequences for Africa—Proposals for an African Position.’

The idea for this seminal document was born in the early days of Salim’s tenure at the organisation’s helm. Drawing on his extensive diplomatic experience, Salim was struck by the weakening commitment of member states to the OAU’s founding ideals. With the liberation struggle largely over and apartheid beginning to collapse, the OAU—long defined by its role in ending foreign domination and minority rule—now found itself in search of a new raison d’être.

And yet, the challenges had not disappeared—they had simply evolved. While some conflicts were coming to an end, others persisted or erupted. Economic development and continental integration remained more aspirational than real. The human rights situation was no less troubling. Democracy, though gaining ground in parts of the continent, was still fragile, its future uncertain.

Africa urgently needed to reposition itself as the world underwent seismic shifts—the Cold War’s end, democratisation in Eastern Europe, and accelerating regional integration in Europe and the Americas. These changes demanded adaptation and offered opportunities Africa could not afford to miss, or risk being sidelined in the emerging global order.

Salim did more than offer a candid diagnosis of the continent’s predicament—he also advanced concrete proposals, which were endorsed by the OAU Summit in the July 1990 Declaration on the Political and Socio-Economic Situation in Africa and the Fundamental Changes Taking Place in the World. The Declaration became a catalyst for a broad spectrum of decisions and initiatives across the organisation’s areas of work. Many of the African Union’s (AU) subsequent achievements can be traced directly to the foundations laid by these landmark documents.

If action was urgent in 1990 post-Cold War optimism, it is even more so today—driven not by hope, but by uncertainty

There is a striking parallel between that period and the one we are living through today: the magnitude of the upheavals. The multilateral system conceived in the aftermath of the Second World War is arguably undergoing the most profound crisis in its history. National self-interest is resurgent, reflected in the rise of anti-migrant sentiment and a sharp decline in development assistance. International law—never fully insulated from the realities of power politics—continues to suffer serious violations.

This new global context is fraught with dangers for Africa. As the most vulnerable continent on the international stage, Africa is bearing the full brunt of the reduction in official development assistance. Geopolitical and other tensions are fueling renewed quests for influence and a growing internationalisation of the crises that afflict the continent. The erosion of the multilateral system risks further marginalising African countries, exposing them to bilateral power dynamics in which their structural vulnerabilities leave them at a severe disadvantage.

Nonetheless, this crisis may also present an opportunity. As damaging as the decline in international aid may be in the short and medium term, it could serve as a salutary shock – a stark reminder of the urgent need for the continent to reduce its dependency. The ongoing reconfiguration of the global order can—and must—be harnessed as an opportunity, and only by capitalising on its unity will Africa be able to contribute meaningfully to shaping the architecture of the emerging world order.

If the imperative to act was already pressing in 1990—an era of post-Cold War optimism and renewed multilateralism—it is even more urgent today, not driven by hope but by the necessity of navigating a period of profound instability and uncertainty.

The good news is that Africa now possesses assets it lacked in the early 1990s. Then, the priority was to build the political, normative, and institutional foundations for collective action. That work is largely done. Today, across all strategic domains—peace and security, (here, here, here, here and here), governance and democracy (here, here, here and here), human rights (here, here, here, here, here, here and here) and development (here, here and here)—Africa has robust frameworks. Agenda 2063 unifies them within a shared long-term vision, reinforced by dedicated institutions.

Africa’s urgency today lies not in new commitments, but in delivering on those already made

Yet this impressive normative and institutional arsenal still struggles to deliver the expected results. Africa’s economic transformation remains a distant prospect. Exports are still dominated by raw materials, and intra-African trade hovers around 15%. Nearly 67% of the world’s extreme poor live in sub-Saharan Africa. Infrastructure gaps persist, visa restrictions hinder mobility, democratic processes are under strain, and armed conflicts and displacement affect every region.

This gap between Africa’s normative and political ambitions and the realities on the ground is, above all, the result of limited implementation capacity. Africa doesn’t lack tools. What is needed now is a paradigm shift: placing the execution of existing commitments at the core of the continental agenda.

In this light, Salim Ahmed Salim’s 1990 intuition remains deeply relevant. The new AU Commission stands at a pivotal moment, with a unique opportunity to lead through a bold, forward-looking initiative: producing a foundational report—echoing the spirit of the 1990 landmark, but with greater ambition and broader mobilisation to match today’s scale and urgency.

Such a report should provide an unflinching assessment of the continent’s current state and put forward responses centred on one core priority: the effective implementation of commitments already made. It should also reaffirm a fundamental truth: Without unity, Africa will remain easy prey in a world that has never spared the weak—and does so even less today.

Once completed, the new report should be discussed at an extraordinary AU summit in Addis Ababa, bringing together all member states at the highest level. Of course, no report alone can resolve the continent’s many challenges. In the end, it is just a document. But if well crafted—if it captures imaginations, is grounded in truth, and followed by real commitments—it can serve as a powerful driver of change.

In this effort toward renewal, the AU must occupy a central place. As the continent’s legitimate institutional framework for unity, the AU is best positioned to articulate Africa’s collective voice and ambitions. In this regard, a troubling trend must be reversed: summits held with external partners often attract more heads of state and government than the AU’s own meetings.

In May 1963, during the debate in Addis Ababa between those favouring a gradual approach to African unity and those advocating immediate political integration, Kwame Nkrumah may have erred by being ahead of his time. Yet history has since validated the essence of his vision: the limitations of the approach adopted at the founding of the OAU are now evident, and the consequences of deferred integration and unity continue to adversely shape the continent’s trajectory. It is now incumbent upon Africa’s current leaders to do justice to that early intuition, however belatedly.