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Reuters
9 hours ago
- Business
- Reuters
Explainer: What is the UN's development conference in Seville, and what can it achieve?
LONDON, June 26 (Reuters) - Global leaders will kick off the once-a-decade Conference on Financing for Development (FFD4) in Seville, Spain, on Monday, which aims to improve the world's aid and financial architecture. Ambitious reforms to everything from global tax to climate-focused funding are on the agenda. What is the event, who will attend, and what can it achieve? The fourth such conference brings together political, financial and trade leaders to formulate a coherent approach to issues bedevilling global development - from aid to trade to debt. Leaders will formally adopt a 38-page document, opens new tab - dubbed the "Seville Commitment" - which was painstakingly negotiated and agreed prior to the event. It will be a blueprint for development financing for the coming decade, but it is a political commitment, rather than a legally binding agreement. The first FFD's "Monterrey Consensus" in 2002 produced targets for rich countries to spend 0.7% of gross national product on official development assistance and supported the Heavily Indebted Poor Countries Initiative, which eventually yielded billions in debt relief. The last FFD, in Addis Ababa in 2015, produced the 17 sustainable development goals that have guided multilateral funding for the past decade, and focused attention on strengthening taxation and stemming illicit financial flows. This year's backdrop is particularly challenging, with widespread aid cuts across the rich world - and climate change scepticism from U.S. President Donald Trump. The Seville Commitment focuses on reforms to help poor nations adapt to climate crises, such as debt swaps, natural disasters debt pause clauses and an exploration of "global solidarity levies", which could tax highly polluting activities - or the super-rich - to finance sustainable development. It also targets progress towards better debt restructuring frameworks and innovations to boost funding, such as multilateral development banks' efforts to leverage special drawing rights. Leaders will also launch the Seville Platform for Action, which would form alliances to expedite concrete progress on the goals. UN Deputy Secretary-General Amina Mohammed said on Wednesday that more than 70 heads of state and government would attend. They include French President Emmanuel Macron, South African President Cyril Ramaphosa - this year's G20 chair - and sustainable finance rock stars such as Barbados Prime Minister Mia Mottley. World Bank President Ajay Banga is expected, along with development bank chiefs, the Gates Foundation and other campaign groups. Notably absent, however, is the United States, which withdrew during negotiations, opens new tab after it tried, unsuccessfully, to strip climate, sustainability and gender equality from the Seville Commitment. The U.S. absence, and continued discord over the approach to certain other issues, such as debt, could hobble the event's impact. Trump's opposition to goals such as global tax rule changes could make success on that subject tougher. Meanwhile, disagreements between African leaders and key lending nations, such as China, over a debt convention also bedevil substantive progress. But sources said the event could be more successful without U.S. attendees trying to water down objectives, and there is a strong consensus that the world must take urgent action on issues such as climate adaptation funding. The U.N. pegs the global financing gap for sustainable development at a whopping $4 trillion. Multilateral lenders are working to boost funding - but the cash they have been able to mobilise thus far is in the hundreds of billions, not trillions. At the same time, the average interest costs for developing countries as a share of tax revenues nearly doubled since 2014. China's lending to Africa has turned net negative as loan repayments come due, and an estimated 3.3 billion people - and more than half of Africans - live in countries that spend more on debt than health.
Daily News Egypt
26-01-2025
- Business
- Daily News Egypt
East Africa faces food insecurity, economic challenges despite growth: African Narratives
East Africa continues to lead the continent in economic growth rates, yet faces persistent challenges in poverty reduction and food security, according to a new report published Sunday by African Narratives for Strategic Studies. While economic growth shows improvement and inflation rates are relatively declining, the region struggles to translate this growth into tangible improvements for its most vulnerable populations. The East Africa in the Global Context The African Development Bank Group's 2024 annual report projected that East Africa will lead the continent's economic recovery, with a growth rate increase of 3.4%. This follows a continent-wide slowdown in average real GDP growth from 4.1% in 2022 to 3.1% in 2023, attributed to rising food and energy prices, declining export performance, climate change, and political instability. Globally, growth is predicted to decline from 3.6% in 2022 to 3.2% in 2024, rising slightly to 3.3% in 2025. Despite experiencing the highest inflation rate in Africa in 2023, with Sudan at 245.3%, some East African countries like Somalia have seen reductions. However, the cost of living remains high across the region. While global inflation is predicted to decrease to 3.5% by the end of 2025, inflationary pressures continue in several nations. East Africa is the largest recipient of official development assistance allocated to agriculture, and has also seen substantial growth in microfinance fund receipts, particularly in 2020. Economic Challenges in East African Countries Despite abundant natural resources, internal and external factors hinder the translation of resource revenues into improved living standards. East African countries face a complex web of challenges, including climate change, political instability, and limited intra-regional trade, which remains below 15% despite the East African Community's (EAC) integration goals. Rapid population growth, estimated to reach 647 million by 2050 from 332 million in 2023, places further pressure on resources and services. Inflation, though declining, remains a concern, impacting the economies of East African countries. While global food prices stabilised in mid-2024, some East African nations saw increases in basic commodity prices due to reduced production, conflict disruptions, and currency depreciation. Multidimensional poverty, encompassing deprivations in education, health, and living standards, affects 1.1 billion people globally, with nearly half concentrated in Sub-Saharan Africa. Social protection systems in Africa remain fragmented, with formal systems covering only 17.4% of the population. East Africa lags behind other regions in social protection coverage, with only 11% of the population receiving cash transfers. External debt poses a significant challenge, with many African countries facing high borrowing costs. Kenya's debt-to-GDP ratio nearly doubled between 2010 and 2019, while Somalia secured substantial debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. Armed conflicts and political instability exacerbate economic woes, particularly in Sudan, where the ongoing conflict has caused a sharp economic contraction and impacted neighbouring countries. The conflict in Ethiopia has resulted in substantial economic losses and affected vital sectors. Recurring climate events, including droughts and floods, severely impact East Africa, particularly its agriculture-dependent population. Climate change is projected to reduce staple crop production, requiring significant climate financing to address adaptation and mitigation needs. Hunger and Food Insecurity Despite previous progress in poverty reduction, crises like the COVID-19 pandemic have reversed gains, increasing poverty rates across Africa. Hunger and food insecurity are worsening, with millions facing acute food insecurity, particularly in East Africa, where drought, floods, and conflicts contribute to the crisis. The war in Ukraine has also disrupted food availability and prices, further impacting food security in the region. The report suggests several priorities to address these challenges, including increased investment in agriculture, support for small farmers, financial stability reforms, price stability-focused monetary policies, accelerated economic integration, and regional tension reduction. African Narratives for Strategic Studies is a Pan-African non-profit policy research organisation dedicated to reshaping global understanding of Africa and addressing its challenges. Focusing on democracy, security, energy, economic development, and human rights, the organisation amplifies African voices to foster informed discourse and promote sustainable progress.
