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Africa's debt crisis in focus as G7 leaders gather for a financial summit

G7 nations
  • French authorities call on G7 to increase crisis finance for weaker states and collaborate on post-war financial structure reform. 
  • "Summit for a New Global Financial Pact" to address the debt crisis, green finance, and international taxation. 
  • Developing nations struggle with debt and climate funding as G7 faces pressure to take action.

According to French authorities, the affluent members of the Group of Seven (G7) need to take greater responsibility for increasing crisis finance for weaker states throughout the globe and collaborating with them to change the post-war financial structure.

The "Summit for a New Global Financial Pact" will be held in France on June 22–23 and will address issues such as the debt crisis, finance for green technology, the reform of multilateral development banks (MDB), new international taxation and financing tools, and special drawing rights, as seen on the American news agency, Reuters.

"It's urgent for us to act and rethink collectively the international financing architecture," a French presidential official said, adding that Paris had lobbied its G7 partners before next month's conference.

"Today we have a network of development banks in the world which finance international solidarity and which find themselves limited in their capacity to act," he added.

Many developing nations experienced debt difficulty as a result of the coronavirus pandemic because they were expected to keep paying their debts in spite of the severe blow to their economy.

"Africa is heavily indebted and we are paying the price of crises that have followed, including now the Ukraine crisis, so the G7 has a responsibility," another French official noted.

The official said that it was crucial to establish a systematic approach to handling Africa's debt rather than addressing it on a country-by-country basis.

In addition to Africa's financial problems, some of the world's poorest nations are unable to make the transition to a green economy and are finding it difficult to get the money necessary to address the climate catastrophe since they are already feeling its effects. Wealthy nations have yet to fulfill their commitment to generating $100 billion annually in climate funding, a significant obstacle to international climate discussions.

Paris thinks a timeline can be established in June for the following 18 to 24 months, with efforts being consolidated in 2023 at the COP climate change conference in Dubai, the general meetings of the World Bank and International Monetary Fund, and the G20 leaders summit in India.

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