UN official criticizes international financial system over being outdated, unfair

(MENAFN) Claver Gatete, the head of the UN’s Economic Commission for Africa, has criticized the current global financial system, calling it outdated, inequitable, and unjust. Speaking at the 46th Ordinary Session of the African Union’s Executive Council in Addis Ababa, he argued that reforms are necessary to tackle the economic disparities faced by African nations.

Gatete emphasized that despite Africa holding a significant portion of the world’s mineral reserves—30% of global minerals, 40% of gold, and 90% of chromium and platinum—the continent contributes less than 3% to global trade and only 1% to global manufacturing. He also highlighted the disparity in intra-regional trade, with intra-African trade standing at only 16%, compared to 68% within Europe. He noted that these inequalities are not due to a lack of potential, but rather to entrenched structural barriers that perpetuate Africa’s economic dependency.

Gatete pointed out the imbalance in representation at international financial institutions, stating that Africa’s 54 nations hold the same IMF share as Germany. He also drew attention to the issue of credit ratings, with only Botswana and Mauritius holding investment-grade ratings, while other African countries face high-risk labels despite solid economic fundamentals.

The UN official also highlighted the injustice of Africa bearing the brunt of climate change effects despite contributing the least to global emissions. He proposed various reforms, including restructuring debt, reforming financial institutions to give Africa more influence, and establishing an African-led credit rating agency to offer fair evaluations of the continent’s economic realities.

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