THE African Development Bank (AfDB) has called for an overhaul of the global financial architecture that will see African countries’ access to ‘concessional loans’ devoid of the debt crisis.

AfDB made the call in its African Economic Outlook 2024 report released on Thursday, May 30.

The report makes bold proposals to reform the global financial architecture.

It states that giving Africa a greater voice in multilateral development banks and international financial institutions reflects the continent’s growing share of global gross domestic product and rich natural resources.

It advocates for reforms to expedite debt workouts and ensure sustainable debt management for Africa, recognising the slow and cumbersome nature of existing debt resolution mechanisms.

The report also calls for innovative market-based solutions like “Brady bonds,” debt relief for climate purposes, and sovereign debt authority systems.

The AfDB further seeks a reform of the Multilateral Development Banks (MDBs), urging for a revision of their business models to provide long-term concessional financing at scale.

It says this will help developing countries bolster their capital positions, channel a portion of the International Monetary Fund’s Special Drawing Rights (SDRs) to MDBs, and ensure a healthy replenishment of the concessional windows of the AfDB and World Bank.

Speaking on the report at the bank’s Annual General Meeting that ended on Friday, May 31, the AfDB President, Akinwumi Adesina, stated, “Let’s be clear. By seeking to transform the global financial architecture, Africa is just asking for a fair share of access and availability of resources to build on our vast economic opportunities.”

He noted that the report highlighted the glaring inadequacies of the current global financial system in closing Africa’s financing gap for structural transformation, estimated at $402.2 billion annually between now and 2030.

To rectify the disparities, Adesina said the report proposed a bold agenda for reforming the global financial architecture, including leveraging private sector financing, simplifying the global climate finance architecture, enhancing domestic resource mobilisation, streamlining debt resolution mechanisms, and reforming the MDBs.

The ICIR reports that the debt situation in African countries has escalated to a critical level as many countries are in, or at risk of, debt distress.

Last year, Ghana defaulted on its debts and Kenya set out to pay back or refinance a $2 billion international bond before June this year.

In Nigeria, the West African Institute for Financial and Economic Management warned that the country was at a high risk of falling into debt distress, urging the government to look for ways of improving revenue generation.

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, had at the joint meeting with the World Bank and IMF in March this year warned the country regarding trends in its borrowing practices.