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African governments owe three times more debt to private lenders than China

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African governments owe three times more debt to Western banks, asset managers and oil traders than to China, and are charged double the interest, according to research released today by Debt Justice. Western leaders through the G7 have attributed the failure to make progress on debt restructuring to China,[1] but the data shows that this is mistaken.

Just 12% of African governments’ external debt is owed to Chinese lenders compared to 35% owed to Western private lenders, according to the calculations based on World Bank data.[2]

Furthermore, interest rates on private loans are almost double those on Chinese loans, while the most indebted countries are less likely to have their debt dominated by China.

The figures have been released ahead of the G20 Finance Ministers meeting on 15-16 July in Indonesia. Campaigners are calling on Western countries, particularly the UK and US, to compel private lenders to take part in the G20’s debt relief scheme, the Common Framework. Three African countries have applied for the Common Framework, none have yet had any debt relief.

Tim Jones, Head of Policy at Debt Justice, said:

“Western leaders blame China for debt crises in Africa, but this is a distraction. The truth is their own banks, asset managers and oil traders are far more responsible but the G7 are letting them off the hook. China took part in the G20’s debt suspension scheme during the pandemic, private lenders did not. There can be no effective debt solution without the involvement of private lenders. The UK and US should introduce legislation to compel private lenders to take part in debt relief.”

Yungong Theo Jong, Head of Programmes at the African Forum and Network on Debt and Development (Afrodad) said:

“Multilateral and private creditors remain the biggest creditors to African governments. Loans from China have increased Africa’s indebtedness, but by far less than Western lenders. All lenders must participate in debt relief. Western governments must lead the way by making private lenders cancel debts.”

The calculations show that the average interest rate on private sector loans is 5%, compared to 2.7% on loans from Chinese public and private lenders.

12 of the 22 African countries with the highest debts are paying private lenders over 30% of their total external debt payments (Cabo Verde, Chad, Egypt, Gabon, Ghana, Malawi, Morocco, Rwanda, Senegal, South Sudan, Tunisia and Zambia). In contrast, debt payments to Chinese lenders are over 30% in just six of the 22 countries (Angola, Cameroon, Republic of Congo, Djibouti, Ethiopia and Zambia).

IMF Managing Director Kristalina Georgieva has called on the UK and US to pass legislation to stop private lenders blocking debt relief agreements.[3] President of the World Bank David Malpass has made similar calls.[4] Virtually all international debt contracts are governed by New York or English law[5], with 90% of bonds of countries eligible for the G20’s debt relief scheme are governed by English law.[6]

In 2020 and 2021 China took part in the G20’s debt service suspension initiative, but the scheme only suspended 23% of the external debt payments of countries which applied, because private and multilateral lenders were not included.[7] Western governments need to make their private lenders take part in debt restructurings to convince China to also move further on debt relief.

Notes

[1] For example the G7 Finance Ministers said in May 2022: “With regards to the implementation of the Common Framework, it remains essential that all relevant creditor countries including non-Paris Club countries, such as those, like China, with large outstanding claims on low-income countries facing debt sustainability challenges, contribute constructively to the necessary debt treatments as requested.” http://www.g7.utoronto.ca/finance/220520-communique.html

[2] All the figures and calculations are in the briefing ‘Who is African governments’ external debt owed to?’ available at https://debtjustice.org.uk/wp-content/uploads/2022/07/Who-African-governments-debt-is-owed-to_Media-Briefing_07.22.pdf

Summary tables are:

External debt of African governments by creditor grouping, and average interest rate

Creditor grouping External debt to creditor grouping as percentage of total external debt Average interest rate
Private creditors (excluding those based in China) 35% 5%
Chinese creditors (public and private) 12% 2.7%
Other governments 13% 1.4%
Multilateral institutions 39% 1.3%

 

Share of external debt payments from 2022 to 2028 by creditor grouping (% of total external debt payments), 22 African countries with external debt payments over 15% of government revenue

Private (not including China) China public and private Other governments Multilateral
Angola 29% 59% 2% 10%
Cameroon 18% 34% 13% 35%
Cabo Verde 33% 2% 25% 40%
Chad 33% 8% 14% 44%
Congo, Rep 6% 50% 24% 21%
Djibouti 0% 64% 11% 25%
Egypt 36% 3% 16% 45%
Ethiopia 23% 45% 7% 25%
Gabon 40% 16% 7% 37%
Gambia 0% 0% 25% 75%
Ghana 56% 11% 8% 24%
Kenya 29% 27% 11% 33%
Malawi 72% 5% 4% 20%
Mauritania 0% 14% 30% 57%
Morocco 36% 1% 14% 49%
Mozambique 7% 28% 33% 33%
Namibia 43% 4% 5% 48%
Rwanda 37% 9% 20% 34%
Senegal 37% 9% 20% 34%
Sierra Leone 0% 5% 14% 82%
South Sudan 81% 11% 0% 8%
Tunisia 31% 0% 24% 45%
Zambia 45% 37% 8% 10%
Median 32% 11% 14% 34%

[3] “We also are pressing for some of the changes, legal changes that need to happen in New York, in London, to close loopholes for vulture funds and others to prevent debt resolution. We are discussing how we can bring more contingency measures in debt agreements, how to press for more debt transparency.”
https://www.imf.org/en/News/Articles/2022/04/21/tr220421-transcript-of-the-imfc-press-briefing

[4] “Given the depth of the pandemic, I believe we need to move with urgency to provide a meaningful reduction in the stock of debt for countries in debt distress. Under the current system, however, each country, no matter how poor, may have to fight it out with each creditor. Creditors are usually better financed with the highest paid lawyers representing them, often in U.S. and UK courts that make debt restructurings difficult. It is surely possible that these countries—two of the biggest contributors to development—can do more to reconcile their public policies toward the poorest countries and their laws protecting the rights of creditors to demand repayments from these countries.” https://www.worldbank.org/en/news/speech/2020/10/05/reversing-the-inequality-pandemic-speech-by-world-bank-group-president-david-malpass

[5] https://www.imf.org/~/media/Files/Publications/PP/2017/pp113017third-progress-report-on-cacs.ashx

[6] https://debtjustice.org.uk/press-release/g20-debt-suspension-request-90-of-bonds-governed-by-english-law

[7] https://debtjustice.org.uk/press-release/g20-initiative-leads-to-less-than-a-quarter-of-debt-payments-being-suspended

Source: debtjustice.org.uk

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NGO WORK

The World Bank Must Be Held Accountable for Harm Inflicted on Tanzanian Communities by Tourism Project

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The World Bank’s Board of Executive Directors is reviewing the Action Plan (MAP) prepared by the Bank’s management to address the findings of the Inspection Panel’s investigation into the Resilient Natural Resource Management for Tourism and Growth (REGROW) project in Tanzania. The investigation followed a complaint filed by the Oakland Institute in June 2023 on behalf of impacted communities. While the Panel’s findings and MAP will only be made public after its approval by the Board, the Oakland Institute urges the Bank to ensure that demands of impacted communities are addressed by the MAP to redress the harms caused.

“The Bank is responsible for the devastating crisis which has left over 84,000 lives hanging in the balance. For several years, using tax-payer dollars, it financed a project that blatantly violated its operating procedures and safeguards around human rights abuses and forced resettlement. It failed to act when made aware of the violations and continued pouring money into the project. Now the Bank cannot hide behind lame excuses and should fulfil the demands of communities harmed by its financing,” said Anuradha Mittal, Executive Director of the Oakland Institute.

Beacon marking expansion of Ruaha National Park to consume Luhanga village and make communities trespassers in their own lands
Beacon marking expansion of Ruaha National Park to consume Luhanga village and make communities trespassers in their own lands

The US$150 million REGROW project in Tanzania began in 2017 as a credit from the International Development Association (IDA). It was cancelled on November 6, 2024 after nearly two years of advocacy by the Oakland Institute and affected villagers to hold the Bank accountable for enabling the expansion of Ruaha National Park (RUNAPA) and supporting TANAPA, the paramilitary Tanzania National Parks Authority. Its rangers, equipped and financed by the Bank, are responsible for egregious human rights abuses, including extrajudicial killings, forced disappearances, and crippling livelihood restrictions that have terrorized local communities. Forced resettlement was initiated by the Tanzanian government in complete disregard for the Bank’s safeguards that require proper consultation and adequate compensation for affected communities.

“We call on the World Bank to fully assume its responsibility and urgently take these necessary steps to answer our pleas for justice. Our lives are on hold as the threat of eviction looms over us every single day. Our livelihoods have been undermined for years, our children are out of school, our farms sit fallow and our cattle are still being forcibly seized. We cannot continue living like this. The Bank must adequately address our past and ongoing suffering.”

Statement by impacted villagers in Mbarali, January 2025

In December 2024, the Institute worked with the impacted communities to carry out a thorough assessment on the ground to evaluate the consequences of the REGROW project. This research lays bare the devastation caused by the expansion of the park – formalized during the project in October 2023 through Government Notice 754. While the Tanzanian government claims only five villages are now inside RUNAPA, the December assessment found that 28 villages across 10 wards and home to over 84,822 people are located inside the area added to the park. As Tanzanian law forbids settlement in National Parks, these farmers and pastoralists will be forcibly evicted unless the expansion is revoked.

Livelihood restrictions enforced by TANAPA rangers have decimated these communities. Thousands of farmers have been barred from farming by the government. For 551 members of two farmer associations stopped from cultivating rice over the past three years, the economic loss is over US$66 million.1

Herders have also been massively impacted by the restrictions of access to pasture land, cattle seizures, and violence committed by TANAPA rangers. Since 2021, 52 pastoralist families have had cattle seized, losing 7,579 cattle for a value of over US$6 million.2 Since 2018, 39 families have paid the equivalent of US$212,175 in fines to recover 4,757 cattle confiscated by TANAPA within disputed park boundaries. These fees and fines have pushed families into destitution.

Over the course of the project, at least 11 individuals were killed by police or rangers, five forcibly disappeared, and dozens suffered physical and psychological harm, including beatings and sexual violence. Victims and their relatives have lost hope of seeing TANAPA rangers brought to justice while continued repression has stopped many from speaking out.

“The World Bank claimed the project was intended to benefit local communities; it has instead destroyed their lives. It must take responsibility for enabling violence and displacement and ensure that the expansion of the park is revoked,” concluded Mittal.

Impacted communities are demanding that the MAP address the following urgent issues:

  1. Removal of beacons placed marking the expansion of the park and to officially revert park boundaries to the 1998 borders established by GN 436a.
  2. Provide comprehensive compensation for damages incurred by livelihood restrictions and violence inflicted by TANAPA rangers, including:
    1. Value of fines paid by pastoralists to reclaim cattle illegally seized.
    2. Value of cattle auctioned.
    3. Compensation for the loss of agricultural production for three seasons (2023, 2024, 2025).
    4. Compensation for the victims of violence and killings by TANAPA.
  3. Establish a multistakeholder independent mechanism to oversee reparations.
  4. Restore social services to villages impacted by GN 754.
    1. Complete construction on Luhanga Secondary School and provide it with government teachers.
    2. Reopen Mlonga Primary School that was closed in October 2022.
    3. Ensure all villages located within GN 754 boundaries are provided with the power, water, and social services they are entitled to like other villages.

S0urce: oaklandinstitute.org

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NGO WORK

Business, UN, Govt & Civil Society urge EU to protect sustainability due diligence framework

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As the publishing date for the European Commission’s Omnibus Simplification Package proposal draws closer, a coalition of major business associations representing over 6000 members, including Amfori and the Fair Labor Association, has called on the EU to uphold the integrity of the EU sustainability due diligence framework.

Governments have also joined the conversation, with the Spanish government voicing its strong support for maintaining the core principles of the CSRD and CSDDD.

Their call emphasises the importance of preserving the integrity of the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD).

These powerful business voices have been complemented by statements from the UN Working Group on Business & Human Rights, alongside 75 organisations from the Global South and 25 legal academics, all cautioning the EU against reopening the legal text of the CSDDD.

Additionally, the Global Reporting Initiative has urged the EU to maintain the double materiality principle of the Corporate Sustainability Reporting Directive, meanwhile advisory firm Human Level published a briefing exploring the business risks of reopening level 1 of the text.

Concerns stem from fears that reopening negotiations could weaken key human rights and environmental due diligence provisions, undermine corporate accountability and create legal uncertainty for businesses.

The European Commission’s Omnibus proposal is expected to be published on 26 February.

Source: Business & Human Rights Resource Centre

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NGO WORK

Kenya: Court halts flagship carbon offset project used by Meta, Netflix and British Airways over unlawfully acquiring community land without consent

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“Landmark Court Ruling Delivers Devastating Blow To Flagship Carbon Offset Project”, Friday, 31 January 2025.

A keenly-watched legal ruling in Kenya has delivered a huge blow to a flagship carbon offset project used by Meta, Netflix, British Airways and other multinational corporations, which has long been under fire from Indigenous activists. The ruling, in a case brought by 165 members of affected communities, affirms that two of the biggest conservancies set up by the controversial Northern Rangelands Trust (NRT) have been established unconstitutionally and have no basis in law.

The court has also ordered that the heavily-armed NRT rangers – who have been accused of repeated, serious human rights abuses against the area’s Indigenous people – must leave these conservancies. One of the two conservancies involved in the case, known as Biliqo Bulesa, contributes about a fifth of the carbon credits involved in the highly contentious NRT project to sell carbon offsets to Western corporations. The ruling likely applies to around half the other conservancies involved in the carbon project too, as they are in the same legal position, even though they were not part of the lawsuit. This means that the whole project, from which NRT has made many millions of dollars already (the exact amount is not known as the organisation does not publish financial accounts), is now at risk.

The case was first filed in 2021, but judgment has only recently been delivered by the Isiolo Environment and Land Court. The legal issue at the heart of this case was identified in Survival International’s “Blood carbon” report, which also disputed the very basis of NRT’s carbon project: its claim that by controlling the activities of Indigenous pastoralists’ livestock, it increases the area’s vegetation and thus the amount of carbon stored in the soil.

The ruling is also the latest in a series of setbacks to the credibility of Verra, the main body used to verify carbon credit projects. Even though some of the participating conservancies in the NRT’s project lacked a clear legal basis and therefore could not ‘own’ or ‘transfer’ carbon credits to the NRT, the project was still validated and approved by Verra, and went through two verifications in their system. Complaints by Survival International prompted a review of the project in 2023, which also failed to address the problem.

Caroline Pearce, Director of Survival International, said today: “The judgement confirms what the communities have been saying for years – that they were not properly consulted about the creation of the conservancies, which have undermined their land rights. The NRT’s Western donors, like the EU, France and USAID, must now stop funding the organization, as they’ve been funding an operation which is now ruled to have been illegal…

The lawsuit accused NRT of establishing and running conservancies on unregistered community land, “without participation or involvement of the community,” including not obtaining free prior and informed consent before delineating and annexing community lands for private wildlife conservation.

The complaint reads, in part, “(NRT), with the help of the Rangers and the local administration, continue to use intimidation and coercion as well as threats upon the community leaders where the community leaders attempt to oppose any of their plans.” The case was brought by communities from two conservancies, Biliqo Bulesa Conservancy (which is in the NRT’s carbon project area and where 20% of the project’s carbon credits were generated) and Cherab Conservancy, which isn’t.

These two conservancies, the court has ruled, were illegally established. Permanent injunctions have been issued banning NRT and others from entering the area or operating their rangers or other agents there. The government has to get on with registering the community lands under the Community Land Act, and has to cancel the licences for NRT to operate in the respective areas. The NRT’s carbon offset project is reportedly the largest soil carbon capture project in the world.

Source: Business & Human Rights Resource Centre

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