Unions decry rising debt, negative impacts on African countries
Africa may not meet the development target set by the African Union Agenda 2063 and Sustainable Development Goals (SDGs) if the current debt burden continues to overwhelm.
This was the position at a continental workshop on sovereign debt organised by the International Trade Union Confederation (ITUC), Friedrich Ebert Stiftung (FES) and the African Regional Organisation of the International Trade Union Confederation (ITUC- Africa) in Dakar, Senegal.
The labour groups stressed the need to foster collaboration to lessen the debt burden on the African nations.
The parley noted that gathering provided a crucial platform for fostering collaboration, knowledge sharing, and strategic planning to address the pressing challenges posed by sovereign debt in the continent, especially in terms of how the negative impacts of debt affect workers, members of their families, communities, and economies.
The labour bodies were worried that the COVID-19 pandemic exacerbated Africa’s debt crisis and contributed to the attendant vulnerability effects on the global supply chains.
“The ongoing war in Ukraine has also compounded these challenges. We are equally concerned that the African debt profile, especially the ones owed to private creditors, has grown astronomically in recent years with serious unanswered questions of debt efficiency, transparency and accountability issues.
“We affirm that the repercussions of debt distress and its effects have not spared African working women and men. Countries that have defaulted on their debt repayments have tumbled into deeply painful economic crises.
“Several African governments have sought to avoid repayment defaults only by adopting unpopular, harsh and repressive austerity measures. These austerity measures deepen poverty and inequality, entrenching generational and feminising poverty.
“ The deepening poverty situation is also pushing our people, especially those who cannot afford decent energy sources, to embrace climate change worsening practices such as tree felling (deforestation) for fuels and forced migration for survival,” the trade unions stated.
The unions vowed to redouble their efforts to find solutions to the debt crisis currently facing Africa and around the world, including strengthening their calls for the international community to provide timely and sufficient debt relief to countries facing unsustainable debt burdens, and for comprehensive reform for an international debt architecture that prevents the recurring cycle of debt crises in future.
It added that they shall continue to advance the implementation of the new social contract demands – Just transition, employment creation (capacity building and digital education – rights at work, social protection, social dialogue and women empowerment) of the international trade union movement, which, if effectively implemented, will contribute to addressing the social, economic, political and environmental development deficits that neoliberal practices have wrought.
The Continental Trade Organisation said they would continue their resistance against the harsh austerity conditions imposed in response to debt crises across Africa, which include wage and hiring freezes, erosion of social protection safety nets, withdrawal of subsidies, pension reforms, labour flexibilisation reforms, reduced funding for public services including health and education, increases in regressive taxation and privatisations and increased use of public-private partnerships (PPPs), adding that it will instead to promote alternatives that protect workers’ rights and prioritise a job and wages-led recovery for crisis-hit countries.
The meeting also pledged to use research, education and analysis to deepen its advocacy for inclusive, responsive, responsible and efficient debt contracting arrangements and management that work for all.
It added: “We shall link our Illicit Financial Flows (Tax Justice – payment of fair tax share and progressive tax arrangements) campaign with debt as part of our resolve to continue contributing to and ensuring a secured fiscal space to drive our development aspirations.
“On the politics of debts that shape the rules and skew the asymmetry of power against developing economies and the intensification of austerity measures, which have continued to exert adverse effects on workers’ rights, shrink civil liberty spaces and compromise the environment, we shall continue to engage local, national, continental and international development financing agencies such as national central banks, the African Development Bank (AfDB) and the International Monetary Fund (IMF) and the World Bank. We call on those institutions to respond and engage with trade unions across Africa in meaningful dialogue to enhance sustainable, people-first responses to the debt crisis.”
It added to explore and further interrogate a common African trade union position on the practical, safe, secure, and efficient way pension funds can complement national financing for economic infrastructure development.
The parley also stressed that it shall continue to build synergies, collaborations and partnerships with progressive African Civil Society Organisations to advance pragmatic alternatives to the African debt crisis.
In the communiqué, which was issued by the General Secretary of ITUC-Africa, Kwasi Adu-Amankwah, the meeting hinted that it has assisted in the creation of an African Trade Union Economic and Industrial Transformation Network that will systematically and consistently drive the African trade union movement’s agenda on the issues of trade and investment, industrialisation, debt and illicit financial flows and other development financing possibilities.
It added that the network will be the interface vehicle of its engagement with the target entities identified for redressing the sundry fiscal and economic injustices at the national, continental and international levels.