Africa welcomes G8 debt relief plan, wants probe
LAGOS, June 8 (Reuters) - Africans welcomed on Wednesday moves by leading members of the Group of Eight powerful nations to cancel Africa’s debts, while urging the West to examine its own role in creating the problem in the first place.
British Prime Minister Tony Blair and U.S. President George W. Bush said on Tuesday they were close to a debt agreement that they would present to other members of the rich nations’ club at a summit next month.
The prospect of total debt forgiveness for Africa’s poorest nations answers a decades-old call by African leaders who argue the debts — some of which were of dubious origin — divert limited funds away from education, health and infrastructure.
“It is evidence that the G8 leaders are willing to put their political prestige behind debt relief for Africa. That is very encouraging,” said Udoma Udo Udoma, a Nigerian senator who led a group of lawmakers to lobby creditors for relief last month.
“The link to democracy, good governance and anti-corruption is also a challenge to those of us who want debt relief to put our houses in order.”
Sub-Saharan Africa has total of $230 billion in external debt and pays $12 billion a year on servicing. Much of the debt is owed to multilateral organisations, such as the International Monetary Fund and the World Bank, but there is also bilateral debt owed to members of Paris Club and London Club.
About 25 of the poorest African nations have already benefited from a measure of debt cancellation under the Heavily Indebted Poor Countries (HIPC) scheme coordinated by the International Monetary Fund and the World Bank.
Analysts said the new deal to be discussed by G8 finance ministers meeting in London on Friday and G8 leaders meeting in Scotland in July would probably use the same framework.
That framework requires a candidate to sign an IMF programme and undertake economic reforms to reduce debt levels to “sustainable levels” while the new deal would extend the level of relief to 100 percent for a few of those countries.
“This is not hugely different from where we are today with the HIPC initiative,” said Razia Khan, African analyst for Standard Chartered Bank in London.
POST MORTEM
Senegalese minister Aziz Sow said he supported the plan, but called on African countries and creditors to investigate how these debts were built up in the first place to avoid a repeat.
“Anything that goes in the direction of wiping out debt is a good thing, but we must also do a post mortem on what has been done with that debt,” said Sow, whose portfolio includes good governance and African integration.
“We say the debt has been used to build roads — yet very often there are no roads to be seen — or to build schools, but where are the graduates?”
Bolaji Akinyemi, a former Nigerian foreign minister, said Western contractors had often colluded with corrupt African leaders to steal the money loaned for development contracts.
He called on Western creditors to return to Africa billions of dollars in looted funds deposited in their banks to demonstrate good faith before addressing debt relief.
“Africa is on its knees with the begging bowl. I feel insulted by it all. Most of these debts are dubious anyway,” he said.
While indicating some movement on the debt issue, Bush and Blair failed, however, to agree on Blair’s proposal to dramatically increase aid to Africa.
Instead, Bush pledged $674 million to ease famine in Ethiopia, Eritrea and other countries, and Blair promised $300 million, according to the White House.
Salih Booker, director of the lobby group Africa Action, said Bush was being disingenuous by repackaging existing aid money without promising any new funds.
Workers in drought-hit Eritrea said the money was urgently needed to feed hungry people now.
“Having the pledge is very good, but we need the commitment to become effective soon, because the hungry season is reaching its peak now,” said Damien Gugliermina, a U.N. aid worker in Eritrea. (additional reporting by James Macharia in Johannesburg, Andrew Cawthorne in Nairobi, Diadie Ba in Dakar, and Ed Harris in Eritrea)
Source: Reuters (Tom Ashby)
on June 29th, 2005 at 8:27 am
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