Statement delivered by Dr. Hanan Morsy, Deputy Executive Secretary and Chief Economist of United Nations Economic Commission for Africa (UNECA)
V20 MINISTERIAL DIALOGUE X
16 April 2023
Dr. Hanan Morsy, Deputy Executive Secretary and Chief Economist of United Nations Economic Commission for Africa (UNECA)
Let me start by asserting the United Nations Economic Commission for Africa stands ready to support and partner with the V20 to make debt work for climate. I would like here to focus on three areas that I believe are important in that regard.
The first has to do with debt resolution and here we need to make sure that the G20 Common Framework – there is an overhaul of that framework to make it effective, transparent, time bound, and to provide standstill of this service upon application as well as expand its eligibility to include middle income countries.
The second point relates to the need to enable countries to have access to financing that is needed for investments in climate action. And to do that, there is a need to ensure improved terms of lending to be available, including lower cost of borrowing, longer maturities, as well as allowing state contingent repayments. And in that area, I believe that it is critical to ensure availability of concessional financing, including of course from the IMF and the World Bank. And what is really key is to ensure that the funding ledgers for the poverty reduction facility and the remaining amounts for the subsidy accounts, that these funding gaps are closed, as well as to ensure additional resources for either in order to avoid a cliff in terms of its financing capacity going forward by $10 billion US dollars and to even expand the concessional financing capacity of the World Bank. And as ECA, we stand ready to advocate on these important asks alongside the V20 in the coming months.
Third, has to do with really focusing on innovative finance to support these issues. And here it’s important to really unlock resources for climate action. This includes credit enhancement and instruments, guarantee facilities, as well as debt-for-climate swaps that would allow countries to reduce their cost of debt servicing and create fiscal space to invest in climate resilience. And we would also be happy to work with the V20 to support countries that are interested in undertaking such swaps.
Finally, I would like to highlight that we need to have 2023 as a year of action. There are many good ideas and solutions that exist, but what we need to see is a move to implementation. And during the various important global forums that will happen this year, we need to collectively push and advocate for change to build a sustainable and prosperous future for V20 members and the world.