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Roundup: Scraping Africa's Foreign Debt, Unkept Promise by West
Heavy foreign indebtedness remains a fatal impediment to economic growth of the African countries as most of the promises by the West to write off debts on the continent do not go beyond lip commitment.
Africa's total debt currently stands at 350 billion U.S. dollars. At the end of 1998, its debt service payments amounted to about 30 billion dollars or 25 percent of its exports.
In a recent letter to the western industrialized countries, U.N. Secretary-general Kofi Annan described the plight of African nations saddled with foreign debts, saying that in Africa, the world's poorest region, 40 percent of government revenues are now being allocated to serving the debts to the detriment of health, education and other essential social services.
This was echoed by the United Nations Children's Fund, which said that "world debt and the policies applied with respect to it cause the death of 500,000 children every year."
The region has to spend four times more on servicing debts than on health and education combined, according to a Jubilee 2000 debt relief campaign group.
So, the African countries need a serious debt relief to be able to come back on their feet. Naturally, they have consistently called on their Western creditors to remove their heavy debt burden.
This issue has become a focus of attention since 1996 when multinational financial institutions and other creditors first agreed on the terms of the Highly Indebted Poor Countries (HIPC).
Last year in Cologne, Germany, leaders of the Group 8 unveiled a plan for up to 100 billion dollars in debt relief by the end of 2000 for about 40 of the poorest nations, mostly in Africa.
They bragged of the debt-relief program, saying that it would wipe out debt owed by these poor countries if they followed reforms supervised by the International Monetary Fund.
U.S. President Bill Clinton took the lead to announce that his country would cancel 5.7 billion dollars debt owed by 36 poor countries, 30 of them in Africa. Britain followed suit, saying it would scrape about 7.5 billion dollars in debt owed by poor countries.
Most of the Western industrialized countries signed up to the much-publicized HIPC initiative.
It seemed that these efforts would hopefully help Africa out of the vicious cycle of debt and poverty. However, so much has been said and too little done. One year has passed and it can be hardly seen any substantial progress in debt relief.
So far only about 10 countries including Benin, Burkina Faso, Mauritania, Mozambique, Senegal, Uganda and Tanzania are eligible for debt reduction.
It is a far cry from the ambitious target of 100 billion dollars debt relief set by the western leaders at the summit last year.
What's the reason? Budget rows with the U.S. Congress have blocked the debt relief pledge by Clinton, while the European Union has delayed releasing relief funds until it sees a specific action from Washington.
Besides, international donors have made tough conditions on debt relief, linking it to moves by African governments to cement democracy, end wars, open domestic markets, fight corruption and implement poverty reduction strategies.
These will affect the on-going economic reforms in the recipient countries. Like what South African Finance Minister Trevor Manuel has criticized that to require African countries to implement poverty reduction strategies before they have the resources to do so is to "put the cart before the horse".
In fact, Africans are not against any reasonable strings attached to the debt cancellation, but these should be inspired by the need to better the living conditions of the masses.
As the world is ushering in the 21st century, African leaders voiced unanimously that the African continent needs a new beginning not encumbered by debt or imperial self-interests. Any person who shares the dream of African renaissance must acknowledge the need to cancel these debts to facilitate African's entry into the mainstream of the world economy.
Debts must be canceled for Africa to "command a voice in world affairs, for it to occupy a seat on the meridian table of civilization and for it to stand tall in a progressive march into the new millennium", they added.
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