Africa Religious Leaders: Debt Forgiveness Key to Region’s Economic Renewal

Interfaith Africa Leaders Call for Changes to Global Economy during Jubilee 2025

Ahead of the Jubilee 2025 year that faith communities are celebrating worldwide, African interfaith leaders called for debt forgiveness and processes to support economic development. Representing Catholic, Anglican, Lutheran and other Christian denominations, Muslims, national councils of churches, interreligious councils across 13 countries in Africa and regional religious organizations, the dignitaries released a statement to the G20, G7, United Nations, IMF and World Bank decisionmakers.

“Our countries … face again agonizing choices between spending and investing on their people and paying their creditors,” said the Africa religious leaders in their statement.“This year alone, Africa will spend $90 billion servicing public debt. Yet, the average African country’s combined spending on health, education and social protection is two-thirds of their debt payments.”

The religious leaders recalled the work of faith communities 25 years ago during the Jubilee 2000 year which led to the largest ever collective debt relief initiative. The Heavily Indebted Poor Countries/Multilateral Debt Relief Initiative (HIPC/MDRI) mobilized more than $130 billion in debt relief in 38 countries.

“Former President Julius Nyerere, of Tanzania, was among the first African political leaders raising their voices to question the need to put debt above the lives of our children,” said Rev. Canon Makunzo Moses Matonya, Secretary General of the Christian Council of Churches in Tanzania. “Unfortunately, we have seen debt rise to levels where we have to face that question again.”

Since 2010, African countries’ interest payments more than doubled, as a percentage of their revenue. At the same time, their combined spending on health, education, social protection and climate amount to two-thirds of debt payments.

“Early in the millennium, debt relief freed the fiscal space for important poverty reduction investments,” said Bishop Matthew Hassan Kukah, of the Catholic Diocese of Sokoto, in Nigeria. “An important focus for us, as then, is that we have good governance safeguards to protect public participation and accountability in the use of those funds.”

Faith leaders in Africa have become increasingly vocal as the continent faces the effects of multiple crises.

“We have allowed a divorce between traditional economic approaches and spiritual values,” said Sheikh Ibrahim Lethome, of the Supreme Council of Kenya Muslims. “As faith leaders, we have a role in guiding our communities so they can make those connections.”

The faith leader statement called for responsible lending and borrowing principles, debt contract clauses that share climate and other risks, and additional sources of finance that do not create debt in order to prevent new high indebtedness cycles.

“While we have moved forward critical debt relief and aid, we still need need improvements in debt relief and aid processes,” said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network, and a co-organizer of the convening of African leaders. “If we had the debt policies and institutions religious leaders called for 25 years ago, we would have tools to help address the climate and poverty crises.”

Read the Africa Religious Leaders' "Heralding a Debt Jubilee in 2025" statement here.

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Interfaith Africa Religious Leaders "Heralding a Debt Jubilee in 2025" Statement

African interfaith leaders meeting convening in Kigali, Rwanda issued a statement calling for forgiving debts, implementing responsible lending and borrowing principles, mainstreaming risk sharing between creditors and debtors in debt contracts and scaling up access to resources for development in non-debt-creating and affordable terms.

Read the statement here.

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G7 Leaders Pressed to Find Debt Crisis Solutions Amid Worrying Growth Forecasts

Ahead of Jubilee 2025 Year, Pope Francis is First Pope in History to Join G7 Summit

 G7 leaders grapple with debt, climate and development crises in Italy from June 13th - 15th. In addition to the presidents and prime ministers hosted in the southern Italian region of Puglia, others in attendance include Pope Francis, the leaders of Brazil, Argentina, India, other developing countries and heads of the IMF, World Bank and United Nations.

The World Bank forecasts low growth rates, which will not be enough for developing countries to achieve key development goals.

“Over three billion people live in countries that spend more on debt payments than they spend on health and education,” said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. “The pandemic, wars, climate challenges and high interest rates force many countries into hard choices between paying debts and investing in their people.”

In advance of the Jubilee year of 2025, for the first time in history a Pope, Pope Francis, joins the G7 meeting. Last week the Pontiff echoed words of Pope Saint John Paul II in 2000 saying that the Jubilee year is an appropriate occasion to cancel international debt and create new processes to solve debt and development crises.

“The G7 is under a lot of pressure to address growing debt challenges in Africa and among developing countries,” noted LeCompte who was with Pope Francis during his remarks on debt at the Vatican last week. “If we can't resolve debt problems and support countries to raise more revenue, poor global growth forecasts will continue.”

The G7 will consider ways to increase lending and aid through development banks. In May, G7 finance ministers noted that agreements made so far will yield more than $25 billion a year in additional finance for climate and other challenges. The largest provider of aid to the poorest countries, the International Development Association, needs substantial resources this year to maintain aid and loans with low interest rates.

“Together with G7 leaders, we won more than $130 billion in debt relief since Jubilee 2000,” shared LeCompte. “While we achieved significant debt relief and won anti-corruption policies, we failed to institute the policies we needed to prevent and resolve future debt crises. In Jubilee 2025, we must win real solutions to prevent debt crises and solve development challenges.” 

Read Pope Francis' June 5th Address on Debt Crises, Development and Jubilee 2025 here.

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How to Ensure Debt Sustainability Accelerates Sustainable Development

Jubilee USA partnered with Friedrich-Ebert-Stiftung New York to publish How to Ensure Debt Sustainability Accelerates Sustainable Development, by Matthew Martin.

The paper was the third to launch as part of a series that gathered practitioners to write on the theme "Debt Sustainability Assessments and their Role in the Global Financial Architecture." The papers will be chapters in a report to appear later in the summer. 

How to Ensure Debt Sustainability Accelerates Sustainable Development, by Matthew Martin

A new study by Matthew Martin makes the case for why and how to adapt DSAs to National Sustainable Development Plans and National Defined Contributions and Adaptation Plans to confront the climate crisis.

The paper addresses three key challenges: adapting DSAs 1) to overall SDG spending needs, 2) to meet urgent environmental crises, including climate change, nature and biodiversity collapse, and the rising incidence of natural disasters, and 3) to meet social crises produced by rising inequality and poverty, as well as pandemics. Mindful of the need for feasible and immediately actionable recommendations, the study has been based on close consultation with civil society experts and representatives of governments and international organizations

Find the webpage for the "Debt Sustainability Assessments and their Role in the Global Financial Architecture" series here.

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New York Senate Legislation Passes to Curb "Vulture" Fund Behavior

New York State Council of Churches, Jubilee USA Network, Oxfam and Partners In Health Issue Statement for Assembly to Pass and Governor to Sign "Champerty" Legislation and Urge Legislature to Pass Stronger Actions

A Senate bill (S5623) aimed at curbing predatory hedge fund behavior passed the New York Senate and is awaiting a vote in the Assembly (A5290) in order to head to Governor Kathy Hochul's desk to be signed into law.

"This legislation should become New York law as it addresses some of the ways that several hedge funds take advantage of developing countries," stated Eric LeCompte the Executive Director of Jubilee USA Network, an organization that works on debt and development policies. "This legislation is a step in the right direction. The legislature will need to take more comprehensive action to deal with all of the negative ways that New York's debt laws harm developing countries."

Advocates argue that more action is needed to improve New York laws that govern more than 50% of the world's private sector loans for countries.

The New York State Council of Churches, Jubilee USA Network, Oxfam and Partners In Health issue the following statement:

Thanks to Senator Krueger and Assemblymember Gonzalez-Rojas, their “champerty” bill (S5623/A5290) represents progress in limiting some of the worst, predatory behavior of the "vulture" hedge funds. As the bill (S5623) passed the Senate, the Assembly should pass the companion bill (A5290) and Governor Hochul should sign this legislation into law immediately.

Most effectively and importantly, the legislation reduces New York’s punitive prejudgment interest rate to a better level and places obstacles in the way of the most predatory speculators suing debtor countries in New York courts.

While this legislation is progress and may help curtail some predatory behavior, it does not deal with the greater concern for New Yorkers and developing countries of dealing with bad faith actors and hold-out behavior.

We support this champerty bill (S5623/A5290) and emphasize the importance of additional legislative action to address the larger issues where New York law harms developing economies.  A critical portion of champerty that would have addressed the larger problem of hold-out behavior and bad faith actors was removed under pressure from creditors.

Billions of people will suffer because creditors removed the good faith provision. The removed language would have ensured that all private creditors would be required to cooperate in qualified restructurings in good faith. Without this language, we lack protections for New York courts, New York taxpayers, poor countries, and official creditors like the United States government.

Legislators in New York have compelling public interest to pass additional legislation that can rectify the power imbalance in sovereign debt restructurings and can help solve these larger problems. While we celebrate progress and this victory with the Senate passage, New York legislators must continue their work to enact further comprehensive reforms such as those included in the Sovereign Debt Stability Act (S5542A/A2970) to ensure that all private creditors governed under New York laws operate responsibly.

 
New York State Council of Churches
Jubilee USA Network
Oxfam
Partners In Health
 
Read the Statement on the New York Senate Passage of the "Champerty" Bill (S5623/A5290) here.

Find the "Champerty" bill here.

View Jubilee USA's Sovereign Debt Stability Act (S5542A/A2970) webpage here.

Find the Sovereign Debt Stability Act bill here.
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NYS Council of Churches, Jubilee USA, Oxfam and Partners In Health Statement on the New York Senate Passage of the "Champerty" Bill

Read the statement as a PDF here

Thanks to Senator Krueger and Assemblymember Gonzalez-Rojas, their “champerty” bill (S5623/A5290) represents progress in limiting some of the worst, predatory behavior of the "vulture" hedge funds. As the bill (S5623) passed the Senate, the Assembly should pass the companion bill (A5290) and Governor Hochul should sign this legislation into law immediately.

Most effectively and importantly, the legislation reduces New York’s punitive prejudgment interest rate to a better level and places obstacles in the way of the most predatory speculators suing debtor countries in New York courts.

While this legislation is progress and may help curtail some predatory behavior, it does not deal with the greater concern for New Yorkers and developing countries of dealing with bad faith actors and hold-out behavior.

We support this champerty bill (S5623/A5290) and emphasize the importance of additional legislative action to address the larger issues where New York law harms developing economies.  A critical portion of champerty that would have addressed the larger problem of hold-out behavior and bad faith actors was removed under pressure from creditors.

Billions of people will suffer because creditors removed the good faith provision. The removed language would have ensured that all private creditors would be required to cooperate in qualified restructurings in good faith. Without this language, we lack protections for New York courts, New York taxpayers, poor countries, and official creditors like the United States government.

Legislators in New York have compelling public interest to pass additional legislation that can rectify the power imbalance in sovereign debt restructurings and can help solve these larger problems. While we celebrate progress and this victory with the Senate passage, New York legislators must continue their work to enact further comprehensive reforms such as those included in the Sovereign Debt Stability Act (S5542A/A2970) to ensure that all private creditors governed under New York laws operate responsibly.

New York State Council of Churches

Jubilee USA Network

Oxfam

Partners In Health

Read the statement as a PDF here

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Eric LeCompte Quoted on the Vatican Jubilee Conference in the National Catholic Reporter

The National Catholic Reporter quotes Eric LeCompte on the Vatican Jubilee conference, Jubilee 2025 and the link between debt and climate change in the developing world. Read an excerpt below, or the full article here.

Ahead of 2025 Jubilee, Pope Francis rallies global finance heads to back debt relief

By Chris White

Eric LeCompte, the leader of Jubilee USA, a network of religious and development groups that advocates for international debt relief, described the pope's remarks as "powerful and forceful."

LeCompte, who attended the Vatican conference, told the National Catholic Reporter that "secular institutions are aware that 2025 is a Jubilee Year" and are interested in using it to push new policies to offer a better global financial model.

"Debt can no longer be disconnected from climate change and mitigation and adaptation," said LeCompte, who believes that the pope has always understood this to be the case, most evidenced by his landmark 2015 environment encyclical, Laudato Si'

"The north really owes a debt to the south because we took all of their resources, fueled industrialization, created the climate change that the south no longer has the resources to deal with," he said. "We took from them and now we owe them a debt to be able to deal with climate mitigation and adaptation."


Read more here.

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Catholic News Service, The United States Conference of Bishops, The Arlington Catholic Herald and The Detroit Catholic Quote Eric LeCompte on The Concept of Jubilee and the Debt Crisis

The Detroit Catholic quotes Eric LeCompte on the concept of "jubilee", the progress made as a result of the last Jubilee year, 2000 and the issues facing developing countries as a result of the COVID-19 pandemic. Read an excerpt below, or the full article here.

Debt relief: Biblical jubilee concern is focus of Holy Year 2025, too

By Cindy Wooden

Eric LeCompte, executive director of Jubilee USA Network, an alliance of faith-based development and debt-relief advocacy organizations, was one of the speakers at the Vatican meeting.

Speaking to Catholic News Service ahead of the gathering, he said that in the Scriptures a jubilee "is about a continuing process to address inequities, a continuing process that protects all of us from having too much or too little."

Thanks to St. John Paul II, Pope Benedict XVI and all the religious and civic partners who came together to push for debt relief in the early 2000s, he said, the foundation was laid "for $130 billion in debt relief for developing countries; 55 million kids in Africa, who never would have seen the inside of a classroom, are going to school. We also changed how aid works, how accountability works. And we moved forward some very significant anti-corruption policies."

But then the pandemic struck.

As governments struggle to pay their debts, decades of progress in development have stalled or even been rolled back, poverty rates among women and children around the world are soaring, unemployment is high in the developing world and price increases -- especially for food and fuel -- are creating hardships even in the wealthiest countries. And all of that pushes migration.



Read more here.

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How Transparency Makes Debt Sustainability Analyses a Trusted and Effective Tool

Jubilee USA partnered with Friedrich-Ebert-Stiftung New York to publish How Transparency Makes Debt Sustainability Analyses a Trusted and Effective Tool, by Gail Hurley

The paper was the second to launch as part of a series that gathered practitioners to write on the theme "Debt Sustainability Assessments and their Role in the Global Financial Architecture." The papers will be chapters in a report to appear later in the summer. 

How Transparency Makes Debt Sustainability Analyses a Trusted and Effective Tool, by Gail Hurley

A new study by Gail Hurley examines the transparency of DSAs across three key pillars: public disclosure, data and methodology openness, and engagement processes. Despite recent improvements, Hurley finds that qualitative aspects of transparency are lacking, with differences in disclosure regimes for low-income and market-access countries and limited access to information during debt distress. The paper emphasizes the importance of improved DSA transparency for driving progress, building trust, and informing better policies. It offers recommendations for enhancing transparency and calls for wider efforts across the borrowing cycle, including the production of DSAs by independent entities to alleviate concerns about impartiality.

Find the webpage for the "Debt Sustainability Assessments and their Role in the Global Financial Architecture" series here.

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An Appraisal of Debt Sustainability Analyses Amid Multiple Crises

Jubilee USA partnered with Friedrich-Ebert-Stiftung New York to publish An appraisal of debt sustainability analyses amid multiple crises, by Sherillyn Raga

The paper was the first to launch as part of a series that gathered practitioners to write on the theme "Debt Sustainability Assessments and their Role in the Global Financial Architecture." The papers will be chapters in a report to appear later in the summer. 

An appraisal of debt sustainability analyses amid multiple crises, by Sherillyn Raga

In an era of high debts and more shocks, should debt sustainability analyses change to adapt? A new study by Sherillyn Raga proposes four ways it can. One is by correcting the IMF’s over-optimistic growth and public debt forecasts for low-income countries, which underestimate the impact of overlapping shocks. The second is by better incorporating the impact of fiscal policy on baseline projections. The third is to produce a stress-test scenario for large shocks to trigger early action and prevent debt distress. Finally, when judgment rather than objective signals guide policy advice to countries, the reasoning needs to be clearly documented.

Find the webpage for the "Debt Sustainability Assessments and their Role in the Global Financial Architecture" series here.

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Debt Sustainability Assessments and their Role in the Global Financial Architecture

Jubilee USA partnered with Friedrich-Ebert-Stiftung New York to publish a series that gathered practitioners to write on the theme "Debt Sustainability Assessments and their Role in the Global Financial Architecture." The papers will be chapters in a report to appear later in the summer. 

An appraisal of debt sustainability analyses amid multiple crises, by Sherillyn Raga

How Transparency Makes Debt Sustainability Analyses a Trusted and Effective Tool, by Gail Hurley 

How to Ensure Debt Sustainability Accelerates Sustainable Development, by Matthew Martin

Read More

Reuters and Yahoo News Quote Eric LeCompte on Ruto's State Visit

Reuters and Yahoo News quote Eric LeCompte on Kenya's President Ruto's state visit with President Biden. Read an excerpt below, or the full article here.

Biden, Kenya's Ruto to discuss Kenyan debt relief this week

By Andrea Shalal, Trevor Hunnicutt and Steve Holland

Eric LeCompte, executive director of Jubilee USA Network, an interfaith alliance of religious, development and advocacy organizations, said the Ruto visit would send important signals about U.S. policy toward the African continent.

"When Ruto speaks, he's really speaking for Africa. And given that President Biden hasn't had the chance to visit Africa yet, this meeting is not only about Kenya, it's really about sub-Saharan Africa as a whole," LeCompte said.

At a meeting Ruto hosted last month, African leaders called for rich countries to commit record contributions to the World Bank's International Development Association, a low-interest facility that developing nations rely on to help fund their development and combat climate change.



Read more here.

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