Public Domain. Smoke rises above Tehran, Iran. Source: UN News

By Daniel D. Bradlow
JOHANNESBURG, South Africa, Apr 3 2026 (IPS)

By Easter 2026 it was still not clear when – or how – the war initiated by Israel and the US against Iran would end. But what was already clear was that it would harm Africa in a number of ways.

Firstly, it would adversely affect the global supply and prices of oil and gas, fertilisers and food. Secondly, local currencies would be affected. More than a month after the war had started a number of African currencies had begun to lose value against the US dollar.

Thirdly, interest rates stopped falling and further rate increases were highly likely. Fourth, there will be a decline in access to affordable foreign financing.

How should Africa respond?

African countries cannot avoid being harmed by the current Gulf war. Nevertheless, based on my work in international economic law and global economic governance, I think there are two lessons that, if followed, can help the continent emerge from the crisis in a better place.

First, governments and societies need to be pragmatic. Their first priority must be to do whatever they can to mitigate the impact of the war, particularly on their most vulnerable citizens. This will require governments to make trade-offs.

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They will have to reallocate budgets to at least maintain the level of imports necessary to meet the society’s basic needs. They will need to convince their creditors to help finance their necessary imports. They will also need to persuade them to be flexible enough that they leave governments with at least some policy space.

Second, states and societies need to identify opportunities within the crisis for actions that over the medium term can help them meet their financing, economic, environmental and social challenges. This requires collaboration between the state and its non-state stakeholders. Business, labour, religious groups, civil society organisations and international organisations all have something to contribute.

Oil price surge is hurting African economies: scholars in Ethiopia, Kenya, Nigeria, Senegal and South Africa take stock

Action in the short run

The focus of Africa’s efforts in the short term must be on minimising the negative effects of the war and on managing the state’s external debts in the most sustainable and effective way.

This is easy to state, but hard to implement. This is particularly the case in the current international environment, in which it is not realistic to expect donor countries and other international sources of finance to be particularly generous.

African countries will need to convince their creditors to acknowledge that this crisis is beyond Africa’s control and that they should not compound the pain that’s being experienced. This will require, at a minimum, that the creditors agree to suspend debt payments for the next year.

Creditors have already accepted the principle that debt payments can be suspended when debt challenges arise from sources beyond the debtor’s control. Many of them have accepted clauses requiring such action under specific conditions in their most recent debt contracts. They also did this during COVID.

Second, African countries, which are already heavily indebted, should challenge their multilateral creditors to accept the consequences of being among the biggest creditors for the continent. This includes the World Bank, the International Monetary Fund and the African Development Bank. By custom these institutions are treated as preferred creditors.

This means that they get paid before all other creditors. Instead of participating in any debt restructurings, they also make new loans to the debtor in crisis. This shifts the debt restructuring burden onto the debtor’s other creditors. It also increases the total amount owed to the multilaterals.

This cannot continue. These institutions need to be more creative in providing Africa to financing. This should include:

• Using their financial resources to guarantee the financial transactions of African countries so that they can reduce their borrowing costs and attract new equity investments.
• More generously supporting innovative debt for development swaps. These involve creditors agreeing with African sovereign debtors to convert a portion of the existing debts into financing for specific local projects, for example in health or education.
• Helping African governments convert their foreign exchange denominated debts into local currency debts at affordable interest rates.

Third, governments should work with the Alliance of African Multilateral Financial Institutions to use these institutions more effectively to finance African development. For example:

• They should require the institutions to only undertake transactions that are consistent with their development mandates. This means no more opaque transactions like the recent one that the African Finance Corporation concluded with Senegal.
• African governments should take the necessary action to activate the African Financial Stability Mechanism that they agreed to establish last year. This would create a useful financial safety net for the continent.

Fourth, African governments must build on the efforts they began last year to become a more effective advocate for African development financing interests at the international level. Among these efforts was the initiative by African ministers of finance to develop common African positions on sovereign debt restructurings. Another was South Africa’s launch of the African Expert Panel that proposed a number of initiatives on African debt and development financing.

In the medium term

African countries should advocate for the IMF to review its governance arrangements so that it becomes more accountable and responsive to developing countries, including African states and societies.

They should also advocate for the IMF to more use its existing resources, including its gold reserves, more creatively to support Africa.

Second, Africa should call for a debate on the preferred creditor status of multilateral financial institutions. This has become particularly relevant because the members of the Alliance of African Multilateral Financial Institutions are claiming that, like all other multilateral financial institutions, they are entitled to this status.

It is not clear that there are good arguments for excluding these institutions from preferred creditor status while protecting the position of the legacy institutions. This suggests that there is a need for some general principles that help determine which institutions should be treated as preferred creditors. These should be acceptable to all multilateral financial institutions and other market participants.

Third, African societies must make every effort to demonstrate that they are taking control of their own development. They should demand that their governments and all other actors in African development finance behave responsibly in regard to the financial, economic, environmental and social aspects of these transactions.

Another medium-term objective should be to limit the illicit financial flows that are so often associated with international trade and investment. This goal would be advanced by the successful conclusion of the current efforts to agree on a UN Framework Convention on International Tax Cooperation.

Prof Daniel D. Bradlow, Professor/Senior Research Fellow, Centre for the Advancement of Scholarship at the University of Pretoria, was Senior Non-Resident Fellow, Global Development Policy Center, Boston University and Professor Emeritus, American University Washington College of Law

Source: Conversation Africa

IPS UN Bureau

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A view of the International Court of Justice (ICJ) at the Peace Palace in The Hague. Credit: UN Photo/ICJ-CIJ/Frank van Bee

By Daniel D. Bradlow
PRETORIA, South Africa, Sep 1 2025 (IPS)

African sovereign debtors in distress face terrible choices. They are often forced to choose between fully paying their creditors and financing the needs of their populations – health, education, renewable energy, water.

Discussions with their creditors focus on financial, economic and contractual issues. The environmental and social impacts of their situation are largely excluded from negotiations.

Thanks to the initiative of some Vanuatan law students, this may be about to change.

Vanuatu is a country consisting of small islands in the south Pacific. It has been ranked as one of the countries most affected by climate change, facing threats of rising sea levels and storm surges. In 2019, a law professor in Vanuatu, Justin Rose, asked his students to propose ways to deal with the climate threat confronting their country.

They suggested that Vanuatu ask the United Nations general assembly to request an advisory opinion from the International Court of Justice on the international legal obligations of states regarding climate change. They convinced their government to adopt their proposal. They also mobilised international support, saying they wanted to take the world’s biggest problem to the world’s highest court.

In 2023, the UN general assembly agreed to seek the International Court of Justice’s advice on the following two issues: the obligations of states under international law to protect the environment from the impact of human-caused greenhouse gas emissions and
the legal consequences for states if they fail to meet these obligations and thereby cause significant environmental harm for present and future generations.

The case attracted unprecedented attention. The court received over 150 written submissions. Over 100 states and international organisations made oral presentations in nine days of public hearings. On 23 July 2025, the International Court of Justice issued a unanimous advisory opinion. It was only the fifth time in its nearly 80-year history to do so.

The court’s opinion was that the obligations of states extend beyond the treaties they have signed and ratified. They also include obligations arising from customary international law. This is the law that states practise out of a sense of legal obligation. It is binding on all states and international organisations, regardless of whether they have signed any applicable treaty.

The rules that matter

The court declared that there are two relevant customary international legal obligations.

The first is a duty to prevent significant harm to the environment. This requires states to exercise due diligence before acting in ways that could cause environmental damage. They must assess both the probability of causing serious harm and the likely extent of any expected impacts.

In making these assessments, states must take into account current binding and non-binding international standards. It also requires states to ensure that companies and individuals subject to their jurisdiction comply with these duties.

The second is a duty to cooperate with other states to protect the environment and to help solve international problems of an economic, social, cultural or humanitarian nature. Here, the court opined that a healthy environment is a pre-condition for the enjoyment of human rights. It affects the rights to life, health and livelihoods, and the rights of children, women and indigenous people.

The court, in discussing the second issue, advised that states can be held legally responsible if they do not take all measures within their power to prevent significant environmental harm. It noted that while all states have this duty, its precise contents will vary depending on their capabilities. The critical factor is the effort the states make and not the results they produce.

The debt angle

Although the court’s opinion is only advisory, it is likely to be highly influential. It was informed by a wide range of submissions. It was a unanimous decision of 15 judges who come from 15 countries.

The fact that the court grounded its decision, in part, on customary international environmental and human rights grounds means that it has implications for any state actions that can have significant adverse impacts on climate, the environment and customary human rights.

My work as an international lawyer working on sovereign debt and development finance convinces me that this includes the renegotiation or restructuring of African debt.

Whatever action African sovereign debtors take to deal with their debt crisis will affect their ability to manage their greenhouse gas emissions. It will also affect their ability to deliver on their obligations to their citizens’ rights. These include the rights to life, health and livelihoods.

This suggests that African sovereign debtors and their creditors need to understand the environmental and climate impacts of their transactions.

They must also work together to resolve their transactions’ negative environmental, social, economic and cultural impacts. Their respective responsibilities will differ depending on their capabilities.

The International Court of Justice opinion may therefore offer new opportunities to make debtor and creditor states, and creditor institutions, accept responsibility for the environmental and social impacts of their actions.

Three possible avenues for relief

There could be at least three ways to relate the climate opinion to debt.

First, the debtor and its stakeholders can use the decision to bolster their arguments for including the environmental and social impacts of debt in their negotiations. They can point out that the debtor state cannot avoid international legal responsibility for the effects of the transaction on its greenhouse gas emissions and on the human rights of its citizens.

They can also point out that its creditors and their home states also have a legal obligation to assess these impacts and cooperate in managing them.

Second, the stakeholders can remind both the sovereign debtor and its creditors about the content of their international legal responsibilities. There are international norms and standards that can help establish that content.

Some of them are:

UN Guiding Principles on Business and Human Rights
the UNCTAD Principles on Promoting Responsible Sovereign Borrowing and Lending
the UN Global Compact
the OECD Principles of Responsible Conduct for Multinational Enterprises
the World Bank Environmental and Social Framework.

In addition, there are many private financial institutions that have human rights and environmental and social policies that often specifically refer to these international standards.

Third, drawing inspiration from the Vanuatu law students, activists around the world can use the judgment to strengthen their arguments. They can say that creditor and debtor states have an international legal duty to prevent significant harm to the environment and to cooperate to protect the environment. This duty extends to ensuring that companies and individuals subject to their jurisdiction act in conformity with these duties. They can be held legally responsible for failing to comply with these duties.

Finally, there are international mechanisms that non-state actors can use to hold debtors and creditors accountable for failing to perform their duties. These include the National Contact Points. These exist in each state that has signed on to the OECD Principles of Responsible Conduct for Multinational Enterprises. Another possibility is the independent accountability mechanisms in the multilateral development banks.

There are also the courts in the growing number of states in which governments, central banks and private actors have been sued for violating their obligations to climate change.

States and financial institutions, of course, can avoid these consequences by respecting the court’s opinion and developing ways of managing African sovereign debt that comply with its international legal advice.

Daniel D. Bradlow is a professor at the Centre for the Advancement of Scholarship, University of Pretoria, South Africa. danny.bradlow@up.ac.za

IPS UN Bureau

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Credit: World Bank

By Daniel D. Bradlow
PRETORIA, South Africa, Aug 24 2023 (IPS)

Many people may be tempted to view the World Bank’s recent announcement that it will freeze new loans to Uganda because of the country’s vicious anti-LGBTIQ+ law as a harbinger of the Bank taking a more progressive approach to human rights issues.

While the announcement is welcome, based on my many years studying the Bank and on my research for my forthcoming book, The Law of the International Financial Institutions, I think there are good reasons to be cautious about its significance.

The World Bank, which has been operating for over 75 years, has 189 member states as shareholders. It funds development projects and programmes in member states that have annual per capita incomes below about US$12,535. The member states elect a Board of Executive Directors that oversees the Bank’s operations and approves all its loans.

The Bank’s Articles of Agreement stipulate that it cannot base its decisions on political grounds. The articles state that the Bank “shall not interfere in the political affairs” of its member states. Nor should its decisions be influenced by the “political character” of these states.

Moreover, the Bank is instructed that it should only pay attention “to considerations of economy and efficiency”. And that it should not be affected by “political or other non-economic influences or considerations.”

The articles don’t define these key terms. They also don’t identify the criteria the Bank should consider when deciding if a particular issue should be excluded from consideration because it is “political” rather than “economic”.

This means that this decision is within the exclusive discretion of the Bank’s decision makers.

Division of labour

The Articles were drafted and agreed in 1944. At the time, the division of responsibilities between those who made the “political” decisions and those who made the “economic” ones seemed relatively clear.

It was assumed that each Bank member state, as an exercise of its sovereignty, would decide for itself how to deal with the social, environmental, and cultural impacts and consequences of the particular transaction for which it was seeking the Bank’s support.

The Bank, on the other hand, would take the state’s decisions on these issues as given. It would merely consider if the particular loan request was technically sound and economically and financially feasible.

This division of responsibility, of course, was unrealistic. The Bank’s Board of Executive Directors must approve each loan. They represent its member states. It is inevitable that officials elected or appointed by – and ultimately accountable to states – will pay close attention to the political implications of their decisions.

And that these considerations may trump the technical merits of the transaction. Thus, inevitably, political considerations, including human rights, have always been, at least implicitly, a factor in Bank operations.

The futility of the Bank’s attempt to exclude political, including human rights, considerations from its operations can be seen at two levels. Firstly, at the level of the Bank’s relations with its member states. Secondly, at the level of individual transactions.

A good example of the Bank’s failed efforts to exclude political factors at the country level was its decision in the 1960s to lend to Portugal and South Africa to fund the construction of the Cahora Basa dam in Mozambique.

The Bank decided to make this loan despite a UN General Assembly effort to impose sanctions on these countries because of their colonial and apartheid policies.

Many African states, supported by a majority of UN member countries, argued that the loan should have been denied. Their case was that the policies of the borrowers violated the human rights of their subjects. They were also a threat to regional peace and security.

The Bank’s General Counsel defended the decision on the basis of the political prohibition in the Bank’s articles and on the technical merits of the project. Despite its ostensible non-political position, the Bank did not make any further loans to South Africa until it became a democratic state.

At the individual transaction level, the Bank funds projects and programmes that have profound social and environmental impacts. Consequently, it is forced to pay attention to some of the political, including human rights, implications of these projects and programmes.

For example, if it finances a road or a renewable energy project, the project will require land. The current occupants of the land may need to be moved to make way for the project.

Alternatively, the project may have social and environmental effects that hurt people. It could, for example, affect the surrounding community’s ability to grow food, or place the community at higher risk of accidents or exposes more young girls and women to the risk of gender-based violence.

If the affected community belong to minority groups in the country, with their own language, culture, and geographic attachments, they may qualify as indigenous people under international law and the Bank’s policies. In this case, the project may require their free, prior informed consent.

However, there are disagreements among states and between the Bank and some of its member states about which communities qualify as indigenous and what is required to ensure that their rights are respected.

For example, some states and Bank stakeholders contend that it is enough to seek the consent of the community’s leadership. But others maintain that the consent can only be established if particular vulnerable groups within the communities, such as women, youth, LGBTIQ+, or disabled people, are given specific opportunities to express their consent.

Some states may argue that giving such attention to these vulnerable groups is inconsistent with local practices and customs and that the Bank, pursuant to its own Articles, should not be interfering with these internal “political” matters.

In all these cases, the Bank has to exercise judgement. This means, for example, that in the Uganda case, the Bank could decide that it should not extend any new credit to

However, it is also easy to see that in another context the Bank – or its Board of Executive Directors – may conclude that on balance it is better to continue lending to the particular country despite serious human rights issues. Or to a particular project because the perceived benefits outweigh the costs.

The challenge, of course, is ensuring that the Bank is making these decisions on a principled and predictable basis. And not according to its own whims and political preferences. And that it can be held accountable for the way in which it makes the decisions.

Daniel D. Bradlow is Professor/Senior Research Fellow at the Centre for the Advancement of Scholarship, University of Pretoria

Source: Conversation Africa

IPS UN Bureau

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