The continent must unite to shape its economic future and to end its dependence on Western financial institutions

In late February 2025, a group of former African heads of state and finance experts gathered in Cape Town, South Africa, to sign the Cape Town Declaration - a bold call for a comprehensive debt relief program for African nations. This initiative, led by the African Leaders Debt Relief Initiative (ALDRI), comes at a time when Africa's economy is shackled by a debt burden that is suffocating development, forcing governments to prioritize repayments to Western and private creditors over essential services like education, healthcare, and infrastructure.

The numbers are staggering. As of 2021, Africa's external debt had skyrocketed to $824 billion, with many countries spending over 60% of their GDP servicing these loans. In 2025 alone, Africa isprojectedto spend $74 billion on debt repayments - money that could instead fund schools, hospitals, and roads. But this crisis is not a simple case of financial mismanagement; it is a direct continuation of a system of economic subjugation that was established during colonial rule and perfected in the post-independence era through institutions like the International Monetary Fund (IMF) and the World Bank.

For decades, African nations have fought to break free from Western economic dominance, and many visionary leaders have proposed radical solutions to liberate the continent. Among the most ambitious efforts were those led by Muammar Gaddafi, who sought to establish a gold-backed African currency, an African Central Bank, and an African Organization of Natural Resources - initiatives that, had they succeeded, could have ended Africa's dependence on Western financial institutions.

The colonial origins of Africa's debt crisis

Africa's modern debt crisis cannot be understood without revisiting its colonial past. European powers extracted resources worth trillions of dollars from the continent while offering little in return in terms of industrial development. When independence movements swept across Africa in the mid-20th century, colonial powers did not simply leave. Instead, they imposed odious debts on newly independent nations, ensuring their continued economic dependence.

Take, for example, the case of the Democratic Republic of the Congo (DRC). When Belgium finally relinquished its grip on the country in 1960, it left behind a destroyed economy and almost no national wealth. Patrice Lumumba, the first prime minister, attempted to nationalize the country's resources to benefit its people. The response from the West? A CIA-backed coup that led to his assassination. In his place, the US and Belgium installed Mobutu Sese Seko, who accumulated billions in debt while plundering national wealth. The people of the DRC are still paying for this crime.

During the 1980s and 1990s, the IMF and World Bank imposed Structural Adjustment Programs (SAPs) on African nations, forcing them to slash public spending, privatize state enterprises, and open their economies to foreign investors. These policies, disguised as "economic reforms," crippled Africa's public sector, increased unemployment, and destroyed local industries - while Western corporations made a fortune.

The debt trap today: A modern form of colonialism

Fast forward to 2025, and Africa remains trapped in an economic structure that benefits Western financial institutions, multinational corporations, and private creditors. According to the African Development Bank (AfDB), nearly 49% of Africa's debt is now held by private lenders (expected to rise to 54%). Unlike concessional loans from the AfDB or the World Bank, these private loans come with interest rates that are five times higher than those paid by Western nations.

And then there's the "Africa premium" - the absurd phenomenon where African countries are charged higher interest rates despite having lower default rates than Western economies.

AfDB President Akinwumi Adesina has repeatedly condemned this financial racism, stating, "There is no economic justification for why Africa, which has some of the lowest default rates, should be punished with higher borrowing costs."

Gaddafi's vision: Africa's path to economic sovereignty

Not all African leaders have accepted this system of economic servitude. Some have tried to overthrow the Western-controlled financial order, and none more so than Muammar Gaddafi. It is in fact undeniable that Gaddafi was one of the most visionary proponents of African economic independence.

Gaddafi's most radical proposal was the creation of an African currency backed by gold, known as the Gold Dinar. This would have eliminated Africa's dependence on the US dollar and euro, allowing African nations to trade with one another in a currency based on their own resources.

Western powers understood that such a move would undermine the supremacy of their financial systems. A leaked Hillary Clinton emailrevealedthat one of the main reasons for NATO's intervention in Libya in 2011 was to prevent Gaddafi from launching the gold-backed currency.

Gaddafi also proposed an African Organization of Natural Resources (AONR), an institution that would have unified Africa's resource management and ensured that the continent's wealth was controlled by Africans, not foreign corporations. And his most ambitious economic project was the establishment of an African Central Bank (ACB), headquartered in Nigeria. The ACB would have served as an alternative to the IMF and World Bank, issuing African currencies and financing development without reliance on Western financial institutions.

A strategic shift: Africa and BRICS

If Africa is serious about breaking free from Western economic hegemony, it must seek alliances beyond the West, and BRICS offers the best alternative. BRICS nations represent a significant share of global economic power, controlling over 31.5% of global GDP (PPP) as of 2024, surpassing the 30% held by the G7.

Why BRICS? First of all, it gives access to alternative financing: the New Development Bank (NDB), established by BRICS, provides loans without the colonial-style conditionalities of the IMF and World Bank. Then, it can build a way to reduce dollar dependence, as BRICS is actively promoting trade in local currencies, which aligns with Africa's own push for currency independence.

We also speak of technology transfer and industrialization: China and India, as emerging industrial giants, can provide investment in infrastructure and technology transfer without the exploitative conditions imposed by the West.

Apart from that, BRICS means fairer trade terms, because, unlike Western trade agreements, which favor multinational corporations, BRICS partners have shown more willingness to negotiate mutually beneficial deals.

Africa must not simply replace Western dependency with another form of subservience. The relationship with BRICS must be strategic, ensuring Africa gains real leverage. First, African nations must demand technology transfer instead of being raw material suppliers. Then AfCFTA (African Continental Free Trade Area) should be expanded to create a strong internal African market before seeking external trade partnerships. And finally, Africa should collectively negotiate with BRICS rather than entering fragmented, nation-by-nation agreements that weaken its position.

The struggle continues

The West killed Gaddafi's dream of economic independence, but it remains Africa's duty to resurrect it. The 21st century must be about dismantling financial colonialism - and forging new alliances that serve African interests. BRICS offers a promising alternative, but ultimately, Africa's economic liberation must come from within. The continent must unite, own its resources, control its currency, and dictate its economic future - or remain forever shackled to the whims of foreign creditors.

(RT.com)