G7 leaders this week pledged to continue reforming the global financial architecture while launching a new drive to secure critical minerals, mainly from Africa.

But the reforms may take years, as lenders will decide which clauses to include in loan contracts, including whether to pause repayments when disasters strike debtor countries.

The G7, comprising the US, Canada, major European economies, Japan and the European Union, has made similar pledges before. This time, it said:“We will continue our efforts to strengthen the global debt architecture, notably by calling for greater transparency in debt data and lending practices among all stakeholders.”“In this context, we urge all G20 creditors to participate in the Data-Sharing Exercise of the World Bank. We note the launch of the Borrowers’ Platform and look forward to continued dialogue with all relevant parties, including the private sector and in the Paris Club, to advance these efforts.”

The Group of Seven said this after meeting in Evian-les-Bains, France, from June 15 to 17. Invited guests included Kenya’s President William Ruto and Egypt’s Abdel Fattah al-Sisi.“We stress the importance of working with all stakeholders to promote fair and transparent development finance, in line with international standards and shared practices. We will strive to mobilise a broad multiactor coalition, including emerging donors, the private sector, philanthropic actors and civil society, to align with this renewed approach,” the G7 said in a joint statement.

For Africa, loans remain the main source of external debt financing for developing countries, especially from multilateral lenders, while about half of developing countries still lack significant access to global financial markets.

In 2024, developing countries paid record interest rates of about 4.9 percent on external loans, more than double the level in 2022, reflecting the severe impact of global monetary tightening.

In 2024 alone, they paid $384 billion in interest on external debt. Over the past decade, government interest payments rose by 102 percent, while revenues increased by only 39 percent.“Improving international debt restructuring mechanisms to make them fairer, more efficient and more predictable can lower risk and is key to restoring access to financing after a default,” the UNCTAD report said this week.“A timely and comprehensive restructuring process that restores genuine debt sustainability and supports rapid macroeconomic recovery enables countries to regain market access more quickly and avoid prolonged exclusion from capital markets. This can also reduce the risk premium, as prolonged and opaque restructuring processes can raise borrowing costs, with investors pricing in the risk of disorderly resolution.”Although Africa accounts for 38 percent of developing countries and 22 percent of their population, it receives only a tenth of total flows to developing countries, while Asia and the Pacific attract more than 70 percent.“We must sort out the issue of access to concessional resources to unlock the potential of Africa. Africa continues to borrow from the international community at significantly high interest rates, even higher than comparable economies in the world. We must deal with a mispriced Africa,” President Ruto said after attending a session on Tuesday.

“There are mechanisms that we can use to de-risk whatever people think is a risk in Africa. There are African multilateral financial institutions that we are building that can act as guarantors for us to access such resources.”The G7 called on multilateral development banks to promote risk-sharing instruments, guarantees, blended finance, co-financing mechanisms and market instruments, and to address exchange-rate risk. “We stress the benefits of derisking solutions and reinforcing the guarantee architecture, notably through the African Trade and Investment Development Insurance,” they said.

For Africa, the decision on critical minerals is just as important. The G7 created a platform to secure critical mineral supply chains. Experts say the platform is aimed at reducing reliance on China.for materials essential to defence, technology, electric vehicles and renewable energy.“We intend to significantly increase recycling rates for critical raw materials by committing to monitor them and measure progress. We will work to develop recycling targets by the end of the year for a number of critical minerals or their derivatives,” a statement by the G7 says.

The Critical Minerals Resilience and Production Alliance marks a move from traditional free-market supply strategies towards direct intervention to counter China’s dominance in strategic resources such as lithium, nickel and rare earths.“That is inconsistent with Africa’s own vision. It is about mining to make these minerals benefit Africa and not the West, so there is nothing surprising there.”

It is not as if these deals are being drawn without our consent; our leaders are consenting. They are willing to sign these deals. Both the West and our leaders are complicit in this logic of extraction without regard,” said Prof Gathii.“Are they talking about the consequences for people living there, the wars being caused, the environmental destruction, the cost to our land and environment, and the cost of not using those resources in accordance with Africa’s vision and the AU mining vision, which is to benefit our people?”“These are issues that reflect long-standing debates on conflict minerals, especially human rights and environmental due diligence, and trade linked to harmful production practices. Weaker governance and poor environmental safeguards further expose local and indigenous populations to these adverse impacts.”

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