The Minister of Foreign Affairs, Samuel Okudzeto Ablakwa, has urged the Commonwealth to lead a united push for reform of the global financial architecture.
He warned that the present system is unjust to countries in the Global South and is strangling Africa's development.
Mr Okudzeto Ablakwa made the call at the Commonwealth Foreign Ministers Roundtable last Wednesday, on the sidelines of the Commonwealth Heads of Government Meeting (CHOGM) in St. John's.
He said the issue of reform must receive closer attention going forward, because countries in the Global South faced clear injustice when it came to access to capital for development.
"It's important for us to recognise that for those of us in the Global South, we face injustice when it comes to access to capital for development," Mr Ablakwa said.
He made the call amid growing Commonwealth attention to debt, climate finance and reform of the international financial system, with former British Prime Minister Gordon Brown also championing the restructuring of the global financial architecture at the Secretary General's lunch last Tuesday.
Borrowing
The minister said African countries were currently borrowing at more than eight times the average cost of credit compared to their friends in the Global North, a situation that had already created an accumulated debt crisis on the continent.
He said a new breed of African leaders was seeking to pursue development based on Africa’s own paradigm and homegrown solutions, but that ambition could not be realised under the weight of strangulating debt.
"But you cannot do that with strangling debt. And the more you seek to wiggle yourself out of the debt crisis, the bigger the problem," he said.
Mr Ablakwa recalled the debt relief achieved at Gleneagles and under the Heavily Indebted Poor Countries (HIPC) Initiative in 2000, championed at the time by campaigners including Bono, and said that after two decades, Africa was back in the same crisis.
"After two decades, we are back to the same crisis, and it's because the system is rigged," he said.
Rating agencies, risk premium
He said reform must begin with sovereign credit rating agencies and the risk premium applied to African countries.
Mr Ablakwa criticised the practice of treating all African countries the same and the prejudice about investing in Africa, which he said drove high interest rates.
"That is what drives the high interest rates.
We need to address that, this so-called political risk and the high risk premium," he said.
He added that the high risk premium made it very difficult for African countries to attract the needed investment to build infrastructure, build schools, build hospitals, industrialise and create jobs for young people on the continent.
African population, Bridgetown Initiative
Mr Ablakwa also drew attention to Africa's demographic reality, affirming that the continent now had the youngest population in the world, with a median age of 19.
He said it was imperative to create a congenial atmosphere and real opportunities for young people on the continent to develop, but that would not be possible without addressing the rigged global financial architecture.
Ghana, he said, supported the Bridgetown Initiative championed by the Prime Minister of Barbados, Mia Mottley, and believed the Commonwealth should begin to pay greater attention to that matter.
