Support Climate-Vulnerable Nations amidst Soaring Debt — Ofori-Atta Urges

Dubai, 1st December 2023  – The Minister for Finance, Ken Ofori-Atta, has stressed the urgent need for the global financial framework to extend support to members of the Vulnerable Twenty Group (V20) currently facing severe financial strain.

Highlighting the concerning trend, the Minister revealed that the external debt stock of the V20 countries had surged to a staggering US$929.14 billion in 2021, marking a nearly threefold increase from US$350.65 billion in 2008. He cautioned that debt service payments were expected to peak in 2024, with V20 economies collectively owing an estimated US$507.182 billion in debt service payments from 2023 to 2028.

This pressing issue was brought to light by the Minister for Environment, Science, Technology, and Innovation, Hon. Dr. Kwaku Afriyie, who spoke on behalf of Mr. Ofori-Atta at a high-level event hosted by the Green Climate Fund (GCF) during the ongoing Conference of Parties (COP 28).

“To address the mounting challenges posed by climate change, I urge all stakeholders, including member states, private sector entities, and international organizations, to fortify the Green Climate Fund (GCF),” he emphasized.

The Finance Minister proposed various measures to tackle the challenges faced by the group, including an increase in financial contributions, a shift in focus towards grant-based adaptation funding, prioritization of Climate Prosperity Plans, advocating for debt relief for climate-vulnerable nations, and promoting public-private partnerships.

Established under the United Nations Framework Convention on Climate Change, the Green Climate Fund operates as an entity within the Financial Mechanism, aiming to aid developing countries in adapting to and mitigating the effects of climate change. The Fund endeavors to mobilize substantial funding to invest in low-emission and climate-resilient development worldwide.

Reports by the UNDP and IMF highlighted that 37 countries urgently require debt relief, with several nations, repeatedly ravaged by disasters, amassing debt at alarming rates. Countries such as Bhutan, Lebanon, Maldives, Mongolia, and Mozambique hold the highest debt-to-GDP ratios.

Addressing the theme ‘The Green Climate Fund: Scaling Up Access and Impact,’ the Finance Minister commended the GCF’s efforts, emphasizing its country-oriented programming strategy that considers the unique needs and circumstances of each nation in combating climate change. He praised Sri Lanka, Bangladesh, and Ghana for taking commendable steps in developing their Climate Prosperity Plans.

Mr. Ofori-Atta stressed the pivotal importance of maintaining transparency and accountability in GCF operations, investing in capacity building and knowledge sharing, fostering continual dialogue and collaboration among stakeholders, and committing to regular monitoring and evaluation of GCF-funded projects. These collective actions are imperative for a sustainable and resilient future amidst climate adversities.

He underlined the significance of recognizing the distinctive circumstances of each country and addressing the burden of climate-related debt to bridge the adaptation finance gap. This approach holds more value than merely doubling the 2019 international finance flows to developing countries by 2025 or setting a New Collective Quantified Goal for 2030, as outlined in the UN Adaptation Gap Report. END