By Reagan Elijah
We cannot solve the climate crisis unless we address the unsustainable debt levels of the Global South. Lower-income countries bear the brunt of the effects of climate change and are forced to borrow to fund the costly recovery from extreme weather events. They eventually borrow to invest in energy transition to reduce carbon emissions and infrastructure to adapt to climate change.
The cost of servicing these external debts reduces their budgets for essential services, public infrastructure, and climate resilience, harming their development and the lives of their citizens. However, the wealthiest countries, which have contributed the most to climate change, are exacerbating the injustice by providing loans to finance climate resilience, which exacerbates the unsustainable debt burdens of some of the world’s poorest and most vulnerable countries. The greater the debt, the less money these countries have to invest in climate resilience.
Africa is home to some of the world’s most indebted countries. This debt is a yoke around our necks, strangling us. Without debt cancellation, the continent will be unable to thrive and fulfill its climate justice potential.
Africa has a very young population, with the majority of citizens under the age of 20. What kind of future do we have if we inherit debts incurred by generations before us? And when we are subjected to climate shocks that we did not cause, we are told that we must repay the debts incurred by previous generations. We face a very uncertain future, but one that will be more disruptive in the coming decades.
Rich countries owe poorer countries a massive climate debt for the devastating effects of the fossil fuels they have burned, but they have no intention of paying for the loss and damage they have caused. Poor countries, especially African nations are deemed to owe massive financial debts to the rich nations, yet cannot pay them without destroying their economies and eco systems.
The wealthiest countries (Global North) that hold the majority of the Global South’s financial debt have to pay their climate debt towards the Global South. Their economic growth has been and continues to be at the cost of over-exploiting the resources of Global South countries. Funding for loss and damage must be unconditional and accompanied by the cancellation of debt that’s forcing African countries to extract more fossil fuels to the benefits of the wealthy.
Statistics show that the poorer world’s debt, now largely forgotten in the rich world, rose on average from roughly 90% of their GDP to 170% between 1990 and 2019. The pandemic has accelerated the crisis, that135 out of 148 nations in the poorer world are now classed as highly indebted.
An analysis in the Global Environmental change journal suggests that $10tn of value is extracted from poorer countries by richer ones every year in the form of raw materials, energy, land and labour. That’s 70 times as much money as would be needed to end extreme poverty worldwide. This extraction provides rich nations with a quarter of their GDP. Much of the Global North’s apparent wealth depends on exploitation.
George Monbiot is right when he says that debt is imperialism by other means. It’s equivalent to the hut taxes imposed by the British in their colonies. These taxes, often levied in currencies Africans didn’t possess, forced them to surrender their resources or labour to colonial projects.
In the current defining decade, foreign debts force nations to surrender their assets to rich countries and multinational companies. While poor nations must surrender their wealth, they must also suffer the climate breakdown imposed on them by the rich.
A global body of research suggests that the G7 nations are responsible for 85% of the CO2 emissions responsible for dangerous levels of heating. Yet the overwhelming majority of deaths caused by climate breakdown happen in the Global South. This represents a massive climate debt that cannot be expressed in financial terms.
Debt For Climate Uganda is mobilizing social and environmental movements in the country on 27th, February 2023 to demand Germany to play her role. The debt cancellation of 1953 also known as the London Agreement was a significant event in the history of international debt.
On February 27, 1953 the world witnessed the absolute proof that debt cancellation is possible. On that I, the debt of Nazi Germany got cancelled. The London Agreement that was signed in 2953 had a number of benefits and impacts.
Reduced debt burden: The London Agreement resulted in a significant reduction in Germany’s debt burden, which helped to stabilize the German economy and set the stage for a period of strong economic growth.
Improved relations: The agreement helped to improve relations between Germany and its creditors, which had been strained by the heavy debt burden and the economic devastation caused by World War II.
Economic recovery: The debt cancellation allowed Germany to rebuild its economy and focus on recovery and growth, which led to an improvement in the living standards of citizens.
Political stability: The improved economic conditions helped to stabilize the political situation in Germany which was important for the country’s future development and integration into the European and international community.
If it was possible to cancel the debt of a country responsible for the atrocities of World War II, then it is definitely possible to cancel the debt of the Global South.
On the February 27, 2023, Germany will be celebrating its 70th Anniversary of WWII debt cancellation. As debt for climate Uganda, we are holding Germany and the rest of the Global North accountable for their climate debt towards the Global South. Germany and the other Global North countries do not only have the power but also the responsibility to take climate action by ending their financial colonialism.
Germany is the 4th largest polluter and also holds the 4th largest voting power in the IMF while o it’s economic miracle to debt cancellation. We are calling on the German finance minister, Mr. Christian Lindner to fulfill his promise to call for the cancellation of the financial debts of the Global South. We also ask the Germany government and the German Ambassador to Uganda H.E Mathias Schauer to get into action by calling for the cancellation of the illegitimate financial debt of a country most affected by the climate crisis.
This vicious circle of debt and climate traps countries in the global South in endless debt crises and accelerates the climate emergency.
We call on Global North governments, private creditors and international institutions, to take urgent and just action to cancel unsustainable and illegitimate debts to ensure a just transition.
To deliver sufficient, new and additional non-debt climate finance to the Global South.
There’s no climate justice without debt justice and no debt justice without climate justice.
Reagan Elijah, Founder, Debt For Climate Uganda.
