UN: African Nations Extorted by International Lending Finance Institutionss 

*Seeks $1.3bn for Nigerians affected by insurgency

Emmanuel Addeh in Abuja

African countries are getting a raw deal from the international financial system which charges them “extortionate” interest rates, the United Nations Secretary General, Antonio Guterres, said at the weekend.
The UN chief, who spoke at the opening ceremony of the annual African Union summit in Ethiopia, also announced $250 million in crisis funding, including for famine risk on the continent.
Guterres called for far-reaching reforms to the structure of international finance to serve the needs of developing countries more efficiently at the event, quoted by Reuters.

“The global financial system routinely denies (developing countries) debt relief and concessional financing while charging extortionate interest rates,” he said.
The UN will spend $250 million from its emergency fund, the largest ever allocation, to respond to several crises around the world, including helping communities at risk of famine in Africa, Guterres later told a news briefing.
The coronavirus pandemic pushed many poor countries into debt distress as they were expected to continue servicing their obligations in spite of the massive shock to their finances.

Public debt ratios in sub-Saharan Africa are at their highest in more than two decades, the International Monetary Fund (IMF) said last year.
Governments on the continent, including Ethiopia, sought debt restructuring deals under an IMF programme to help them navigate the crisis, but conclusion of the process has been delayed.

Others, which have not sought to restructure their debt, like Kenya, have seen their debt sustainability indicators worsen after the pandemic hit their finances.
“African countries cannot… climb the development ladder with one hand tied behind their backs,” Guterres added.
Ethiopia’s Prime Minister Abiy Ahmed echoed the call. “Nearly all of us want to put our economies back on a growth trajectory but this will not happen without sufficient restructuring to make our external debt sustainable,” he said.

The summit, which brings together leaders from the 55 African nations, is also focusing on deepening food and security crises on the continent.
Armed conflict from the Sahel to the Horn of Africa and the impacts of droughts and floods have driven ever more Africans from their homes.
Hunger, driven by the impact of the armed conflicts and also extreme weather that scientists have linked to climate change, has also worsened in several nations.
Somalia is on the verge of famine after five failed rainy seasons, with hundreds of thousands of people suffering catastrophic food shortages.
“We need to critically assess why one third of the hungry people in the world are in our continent,” Abiy said.
Meanwhile, the UN has appealed for $1.3 billion to provide assistance to 6 million Nigerians who are suffering the impact of a long-running Islamist insurgency in the northeast of the country.

The militant Boko Haram group and its offshoot, Islamic State West Africa Province, have been fighting Nigerian security forces in the northeast for over a decade, displacing more than 2 million people and killing hundreds of others, aid agencies say.
Matthias Schmale, the UN resident and humanitarian coordinator for Nigeria said the “large-scale humanitarian and protection crisis shows no sign of abating”.
The number of children suffering from acute malnutrition was projected to increase to 2 million this year, up from 1.74 million last year, the UN said.
“Women and girls are the hardest hit,” Schmale said when launching the financial appeal in north-eastern Adamawa state.

He said more than 80 per cent of people in need of aid across three states – Borno, Adamawa and Yobe – were women and children. “They face increased risks of violence, abduction, rape and abuse,” he said.
Nigeria’s government says it is winning the fight against insurgents and that some areas have now been cleared of militants and are safe for villagers to return.