Committee for the Abolition of Illegitimate Debt

See the teaser of the Seminar hereici.

The workshops covered the following topics:

• Debt, a cause of Africa’s underdevelopment;

• Free trade agreements and debt in Africa: two instruments in the service of imperialism;

• The impact on local populations of projects financed by the African Development Bank (AfDB);

• Micro credit and debt in Africa;

• Proposals to escape the debt trap.

Led by activists and civil society organisers, these modules generated discussions and debates in plenary session that led to the adoption of the following resolutions and recommendations:

 A – Resolutions

The civil society actors present at the seminar:

1- Reaffirm their commitment to become more mobilized, to organize and to combine their efforts in the struggle against illegitimate, illegal, unsustainable and odious debts in Africa;

2- Undertake to step up actions/campaigns to inform, raise awareness and educate the populations about debt, in order to build strong social movements capable of reversing the balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. of power in favour of the popular classes;
3- Encourage African civil society organizations to conduct citizen debt audits in their respective countries, with the effective participation of citizens in the process;

4- Urge African civil society to set up national, regional, continental and even international social dynamics to broaden the front against illegal, illegitimate, unsustainable and odious debts in Africa;

5- Reaffirm the popular will to achieve real independence and sovereignty for the countries of the South.

 B- Recommendations

The African civil society:

1- Urges all African leaders to repudiate illegitimate, illegal, unsustainable and odious debts and to withstand antisocial and neoliberal conditionalities imposed by the Bretton Woods Institutions (IMF IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org and WB World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

) and by the African Development Bank (AfDB);
2- Demands that African states stop using the CFA franc CFA and create their own national currencies with national central banks to determine the parities of their currencies according to their specific economic circumstances;
3- Urges the African leaders to set up a Bank of the South as an alternative to the international financial Institutions (IFI);
4- Urges the governments of countries of the South to take sovereign unilateral measures to reduce their debts, which is the only way towards self-determination of their peoples;
5- Calls for a citizens’ audit of Togo’s public debt, involving all sections of civil society and the country’s working classes. Demands the right to information and free access to all documents relating to this debt.
6- Urges African states to develop alternatives to debt in order to finance their development projects and programmes, in particular by adopting a fair tax system that increases state resources and reduces the need for external debt financing, and by promoting an endogenous, self-centred development model with priority given to guaranteeing the economic, social, cultural and political rights of peoples;

7- Calls on African leaders to be more transparent and accountable in the management of public debt vis-à-vis their populations;

8- Demands that a control system be put in place to stop illicit financial flows and to help Africa repatriate these funds and prosecute fraudsters;

9- Calls for the so-called “economic partnership” agreements and the African continental free trade area to be called into question, as they are colonial agreements and constitute a mechanism for the extractivist plunder and domination of our countries by multinationals;

10- Demands the implementation of alternative trade cooperation projects built on the principles of solidarity, complementarity and justice, and places human well-being at the centre of these principles;

11-Rejects the microcredit system, which exacerbates poverty, and denounces the harassment of women in particular by microfinance institutions;
12- Demands the creation of an interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. -free or lower-interest public credit system for the poor, while continuing to create jobs by increasing investment budgets in the public sectors, halting the dismantling of public services (education, health) and renationalizing strategic economic sectors as well as privatized agricultural land;

13- Encourages the internationalization of the Belgian law on vulture funds Vulture funds
Vulture fund Investment funds who buy, on the secondary markets and at a significant discount, bonds once emitted by countries that are having repayment difficulties, from investors who prefer to cut their losses and take what price they can get in order to unload the risk from their books. The Vulture Funds then pursue the issuing country for the full amount of the debt they have purchased, not hesitating to seek decisions before, usually, British or US courts where the law is favourable to creditors. in order to thwart their actions;

14- Demands that European countries recognize and pay their climate debts to African countries, without using conditioned loans, as compensation for carbon and greenhouse gas emissions.

15- The social movements denounce and draw the attention of leaders to the illegitimate nature of the annual meetings of the International Monetary Fund and the World Bank, as well as their harmful consequences on populations’ living conditions. The CADTM Africa network therefore calls for a great mobilization of the World’s social movements at the Counter-Summit of the Peoples in Marrakech, Morocco, from 12 to 15 October 2023, in counter-action of the annual meetings of the International Monetary Fund and the World Bank.

Lomé, 9 September 2023

The CADTM Africa Coordination