Namibian president slams global financial system for unfair borrowing costs

This past weekend, the President of Namibia, Dr Netumbo Nandi-Ndaitwah, delivered a scathing critique of global financial systems that impose unjustly high borrowing costs on her country due to skewed risk perceptions.

Speaking at the G20 Leaders’ Summit held over the weekend in Nasrec, Johannesburg, Dr Nandi-Ndaitwah highlighted the pressing need for an inclusive approach to addressing Africa’s development challenges.

“We cannot emphasise enough the growing recognition of Africa’s role in the global economy and the importance of addressing development priorities from an African perspective,” she stated, shedding light on the continent's significant contributions yet persistent obstacles in the form of unfair financial policies.

She said that despite Namibia’s track record of fiscal responsibility, which includes the timely repayment of 750 million USD in international obligations, the nation continues to be categorised as a high-risk country by global financial decision-makers.

"In the face of unfair financing terms. and despite Namibia having recently honoured its international financial obligations by repaying 750 million USD on time amid strong fiscal responsibilities. However, we are considered by the decision-makers as a risk country. It is this debt trap that prevents growth," Dr Nandi-Ndaitwah lamented, arguing that such misperceptions perpetuate a cycle where low-income countries, including Namibia, find it challenging to access necessary financial support from institutions like the International Monetary Fund.

The two-day summit highlighted the ongoing struggles of Africa and other low-income nations, culminating in the adoption of a declaration aimed at alleviating the continent’s crippling debt obligations, an issue that has persisted for decades.

Dr Nandi-Ndaitwah called for a radical transformation of global financial institutions, advocating for fair financing models rather than mere handouts.

Her vision centres on enabling countries to industrialise, add value to their resources, and foster broad-based development for their people. “Our focus on advancing the transformation of global governance must be underpinned by the common understanding that only an inclusive and representative international system will have the capacity to respond to present-day challenges,” she asserted.

The summit's leaders collectively acknowledged the urgent necessity to tackle the debt crisis affecting primarily Global South countries, although notably without representatives from the United States. Their discourse included a commitment to easing the debt burden on developing nations, enhancing climate disaster response capabilities, and increasing financing for green energy transitions.

In their declaration, the leaders recognised that high debt levels are significant barriers to inclusive growth within developing economies, limiting their ability to invest in vital sectors such as infrastructure, healthcare, and education. They conceded that while the risk of a broader debt crisis is currently contained, many low and middle-income nations still face unacceptably high financing costs and extensive refinancing needs.

The G20 reaffirmed its dedication to implementing measures aimed at tackling debt vulnerabilities comprehensively. Recognising Italy's commitment to halving low-income country debt over the next decade, they reiterated their support for the G20 Ministerial Declaration on Debt Sustainability, promising cohesive action towards this end.

In closing, South African President Cyril Ramaphosa expressed profound gratitude for the collaborative efforts of world leaders during South Africa's G20 Presidency this year, reflecting a hopeful outlook for future global cooperation.