Development finance, debt and the SDGs · at 12 min · 5 mentions in this passage
The test of equality does not end with the institutions that govern peace. It extends to the institutions that shape prosperity. The same question confronts us there: Does the international financial system give every nation a fair opportunity to secure the well-being of its citizens? The charter did not conceive development as charity. It pledged social progress, better standards of life, and economic and social advancement for all people. Yet, for too many countries, the resources required to fulfill that promise are being consumed before they can reach their people. Global public debt reached a record $102 trillion in 2024. Developing countries accounted for less than a third of that debt, yet paid about a trillion dollars in interest on debt in that year alone. Put it differently: 46 developing countries now spend more on interest on debt than on classrooms and medicine. Behind these numbers lies a simple reality. The hospital competes with a creditor. The classroom competes with debt service. And too often, the creditor. Debt service is paid fast. And it is our children who inherit the consequences. Today, 251 million children and young people remain out of school. Millions more enter classrooms without teachers, books, meals, and facilities they need to learn. When debt service displaces investment in education, we are not merely balancing budgets. We are transferring the cost of today's financial burden to the next generation of citizens. Kenya has chosen to invest in the next generation. Over the last four years, we have spent an additional $5.3 billion in education, recruited 100,000 additional teachers, built more than 23,000 new classrooms, and we are developing another 1,600 laboratories while expanding support for universities and technical institutions. We do this because education is not consumption. It is the infrastructure of opportunity, productivity, and national transformation that supports global advancement. But national effort can only go so far when the international financial system makes development more expensive. The countries that most need capital frequently pay the highest price to obtain it. Developing countries have recently borrowed at rates two to four times higher on average than developed nations. The question, therefore, is not simply whether finance is available. It is who can access it, at what price, for how long, and under whose assessment of risk. Africa knows the cost of that assessment. Sovereign credit rating shapes perceptions of risk. The interest countries pay, and even the volume of finance available to them. UNDP estimates that subjectivities in credit ratings have cost African countries approximately $75 billion through excessive interest and foregone lending. Risk, ladies and gentlemen, must be measured, but it must also be measured fairly. We cannot build a fair global economy if the nations with the greatest development needs face the highest cost of development finance. A road that is commercially viable should not become unviable merely because it crosses an African border. A power project should not cost more simply because of the passport of the country it is building. Capital must price risk. It must not price prejudice. Reform of the international financial architecture must therefore begin with the cost and availability of capital. The UN charter envisaged multilateral development banks that lend more, lend longer, and mobilize private capital at scale. It further contemplated guarantees and risk-sharing instruments that reduce the cost of viable investments. And we need greater access to long-term and local currency finance so that countries are not forced to build long-term infrastructure with short-term expensive money. And by the way, this is not an argument against responsibility. Governments must also do their part to manage debt prudently, strengthen institutions, prepare pipelines of credible projects, deepen domestic capital markets, honor contracts, and confront corruption without equivocation. A fairer international system requires responsibility on both sides. Reform abroad cannot substitute for accountability at home. Distinguished delegates, Africa does not come to plead. We come with a proposal.
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