During a West Africa trip, the United Nations chief also called for more investment for states particularly affected by climate change to help their economies recover from the COVID-19 pandemic and cushion the effects of the war in Ukraine.
“International financial institutions need to take urgent action on debt relief by increasing liquidity and fiscal space so that governments can avoid default and invest in social safety nets and sustainable development,” Guterres said according to Reuters.
The United Nations has made proposals to the World Bank and IMF to mobilize various resources and instruments for debt relief, but so far the actions taken have been insufficient, he added.
Poor countries face economic ruin from simultaneous crises of food, energy and finance due to supply disruptions caused by Russia’s invasion of Ukraine, the U.N. Secretary-General emphasized a few days earlier.
Furthermore, he stressed major imbalances in investment in recovery after COVID: Per capita economic growth in Africa is expected to be 75% lower than the rest of the world over the next five years.
Concerns about a looming debt crisis in the Global South are steadily growing. DRGR, therefore, proposes comprehensive debt relief that is oriented around green, inclusive recovery.