September 23, 2005

This statement defines real 100% debt cancellation for Africa as understood by Africa Action. It is equally a statement of solidarity with civil society throughout Africa, whose leaders have long declared Africa’s debts to be both unpayable and illegitimate. Africa’s debts must be cancelled as a matter of economic justice because they are largely illegitimate and odious debts. They must equally be cancelled as a matter of economic development because they prevent Africa from investing in education, eradicating poverty and successfully combating the HIV/AIDS pandemic and other devastating diseases such as Tuberculosis and Malaria.

100% debt cancellation for Africa means the unconditional cancellation of all the external debts of all African countries. Cancellation must be outright and irrevocable, it must include all African countries and creditors, and it must be free of conditions. The financing of debt cancellation must be borne by the wealthy creditor nations and the international financial institutions which they control. The illegitimate nature of these debts should be publicly acknowledged. Anything less than this cannot be considered 100% debt cancellation.

The Damages of Debt

Africa is the most impoverished region in the world today but it subsidizes the wealthy economies of the world through a net transfer of wealth in the form of payments for illegitimate debts. More money flows out of Africa each year in the form of debt service payments, than goes into Africa in the form of aid. Over the past 3 decades African governments have already repaid more than they have borrowed.

A majority of Africa’s people are forced to live on less than $2 a day and the United Nations reports that Africa will not reach the “Millennium Development Goal” of reducing poverty levels by half for another 150 years if current trends continue. Nevertheless, Africa pays more each year to wealthy creditor institutions than it can spend on healthcare or education for its own people.

Debt payments subordinate the interests of African people to those of rich creditors. This asymmetry of power also perpetuates African countries’ lack of freedom to pursue economic policies of their choosing and diminishes their sovereignty. Servicing massive external debts, moreover, discourages both domestic and foreign investment and stifles economic growth.

Don’t Owe, Shouldn’t Pay: Odious Debt, Illegitimate Debt, Unsustainable Debt – Who Owes Whom?

Africa's foreign debts were mostly incurred by unrepresentative and despotic regimes during the Cold War years. With the complicity of creditors, these loans were used for purposes contrary to the interests of African nations. This is known as odious debt. The Bush Administration has declared Iraq’s $120 billion foreign debt to be odious by this definition and is aggressively promoting its cancellation. The refusal to acknowledge the odious nature of Africa’s debts reveals a harsh double standard based on geopolitics and opposed to justice.

Many loans that were made for development projects or contracted by legitimate governments should also be considered illegitimate in nature because the projects were poorly conceived, imposed by creditors, and benefited foreign or corporate interests over the interests of African people. Many loans were spent on projects and economic reforms that were harmful to people, communities and the environment. In other cases the economic conditions of loan agreements further impoverished the recipient nations.

Africa’s debt is not only odious and illegitimate; it is also unsustainable and the single biggest obstacle to the continent's development. Servicing these debts diverts money directly from spending on health care, education and other important social needs. It also retards economic growth and discourages investment in African economies.

Finally, many Africans question the notion of an African “debt” to the U.S. and European countries and the financial institutions they control after centuries of exploitation. They ask, “Who really owes whom?” For Africa’s people, debt payments are simply a continuation of the continent’s historic role of financing the development of northern countries at the expense of the lives of thousands of African children who die each day from easily preventable malnutrition and diseases. African civil society organizations are increasingly moving beyond demands for debt cancellation to demands for their own governments to repudiate foreign debts and demands for reparations from the wealthy minority of countries that historically enriched themselves through the impoverishment of Africa and Africans. Africa Action supports this movement.

The G-8 Deal is Not Enough!

Despite the exaggerated claims of the G-8 countries about debt relief for Africa at their July summit in Gleneagles, Scotland, the richest governments in the world are not proposing 100% debt cancellation for Africa. The G-8 proposal to cancel the debts of 14 African countries (and 4 Latin American countries) owed to the World Bank, the IMF and the African Development Bank, is schedule to be voted on at the annual meetings of the International Financial Institutions on September 24-25, 2005. If approved, it will exclude the majority of African countries and the majority of Africa’s debt. It will also establish the precedent that such debt relief will only be offered to countries that have submitted their economies to the draconian dictates of policies imposed by the rich creditor countries.

The existing debt relief framework, the Heavily Indebted Poor Countries (HIPC) Initiative, has failed to provide a solution to the debt crisis. Designed by creditors in 1996, it dictates economic policies and extracts the maximum in debt repayments from poor countries before writing off the balance. Recent World Bank and IMF reports concede that the HIPC Initiative has failed to provide an exit from the debt crisis that these countries face. Independent audits of these two institutions have confirmed that they can afford to write off Africa's debt completely.

The 14 African countries in the present debt cancellation proposal were not chosen because they are the poorest countries. Rather they were chosen because they’ve already completed the harsh HIPC program and received some debt relief, but it has proven to be insufficient to halt their further impoverishment. 18 more African countries are still involved in the HIPC program, while another third of Africa’s low- and middle-income countries are excluded altogether due to inappropriate measurements of per capita wealth, which rank them as insufficiently poor to qualify for such debt relief.

In light of the illegitimate nature of Africa’s debt, it is inappropriate for creditors to put any conditions on the cancellation of irresponsible loans. Conditioning debt cancellation on economic policy prescriptions further erodes African countries’ sovereignty to determine their own economic policies. African governments should be accountable to their people not creditors in Washington.

100% Debt Cancellation Now!

As the World Bank and the IMF hold their Annual Meetings, Africa Action joins with debt campaigners in Africa demanding the unconditional cancellation of all the external debts of all African countries. Africa Action will continue this work until African debt campaigners are satisfied that all odious, illegitimate, and unsustainable debts are cancelled.

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APPENDIX

Debt and HIV/AIDS: A Deadly Combination!

To highlight the relationship between debt, health, and HIV/AIDS on the African continent, Africa Action has compiled a table comparing debt service expenditure and spending on health. The table below puts these issues in perspective and highlights the following:




Between 1970 and 2003, African countries received about $540 billion in loans and paid back $580 billion in debt service, yet the continent is still saddled with a crippling $330 billion in external debt.

This burden of debt diverts money directly from spending on health care and other important needs. In 2003, African countries paid over $25 billion in debt service fees, even as 2.3 million Africans lost their lives to AIDS. In Angola, about 240,000 people live with HIV/AIDS and yet that country spent $106 per capita on foreign debt payments and only $38 per capita on health.

Many of Africa’s most impoverished countries spend more per capita on debt service than on health care. For every dollar spent on health care in 2002, the Democratic Republic of Congo spent more than four dollars on debt service – this in a country where 1.1 million people are living with HIV/AIDS.

Even if the Group of 8 (G-8) proposal to cancel the debts of 14 African countries were immediately implemented, it would have no effect on the majority of African countries, who will still spend more on debt service than on vital social services.

To educate the world’s children, donors must deliver

Ibrahim Ary, Zobaida Jalal, Galema Guilavogui, Ann-Therese N’dong-Jatta and Fabian Osuji IHT
Monday, March 8, 2004

Women’s day
 
WASHINGTON As school bells ring across the world on Monday, which is International Women’s Day, more than 100 million primary school-aged children will not be sitting in class — and about 60 million of those missing out will be girls. On average, in the poorest countries in Africa one girl in two is not in school.

The crisis extends to another 150 million children who will never complete their primary education.

Neither Western nor developing-country governments need to be convinced of the need for education for all. The case is compellingly clear: No country has reached sustained economic growth without achieving near universal primary education. Particularly for girls, education is related to lower infant mortality rates and higher life expectancies. Educated women marry later, have fewer children and raise healthier, more nourished families.

New research also indicates that education is crucial in the fight against AIDS. Women with some secondary schooling are three times more likely than uneducated women to know that the AIDS virus can be transmitted from mother to child.

Four years ago, at a meeting in Dakar, Senegal, 182 countries committed themselves to the goal of universal primary education for boys and girls by 2015. But despite such strong commitments, the funding needed to get children into schools, estimated at an additional $5.6 billion annually, remains elusive. The sum is the equivalent of just three days’ worth of current global military spending. It also equals the cost of building just 330 high schools in the United States.

A major step toward achieving universal education was taken two years ago at the World Bank spring meetings, with the introduction of the ground-breaking plan called the Fast Track Initiative.

The initiative was a new compact between donor and developing countries: If developing countries developed sound, credible plans to expand education access and quality, donors would not let them fail for lack of funding.

The five countries we represent were part of an initial group of 23 countries invited to prepare proposals. Our side of the bargain was to adopt a tough agenda for reform, including raising education spending to 20 percent of the national budget, reducing class sizes to less than 40 pupils per teacher and abolishing primary tuition fees. In return, donors agreed to guarantee enough extra funding to make these ambitious reforms feasible and to cover any costs that could not be met out of each government’s own budget.

It seemed the perfect solution — aid was to serve as a jump-start, not a handout. Donor contributions would accelerate reform and enable us to implement vital reforms like training teachers, building classrooms and eliminating fees. The responsibility for producing sound plans and turning them into reality rightly lay with developing countries’ governments.

Yet two years later, while many of us have committed ourselves to ambitious reform of our education systems in order to get every girl and boy into school, donors have failed to deliver the funding they promised. Niger is a clear case in point. It is ranked by the United Nations as the second-poorest country in the world. A mere 8.4 percent of Niger’s women can read, and an estimated 1.4 million children of primary school age are out of school.

Under the Fast Track Initiative, the government developed a national strategy to provide quality basic education for all its children. In the process it identified a need for external funding of $96 million over the first three years to fulfill the plan.

Recent research by Oxfam, however, reveals that after endorsing Niger’s education plan, donor governments then backtracked, leaving a mere $46 million to be doled out for Niger over three years — less than half the amount initially promised. They have failed even to fully finance this version, and Britain and the United States have not committed a single cent to education in Niger under the initiative.

The first 12 countries to meet the Fast Track criteria for funding have received commitments totaling only $443 million over five years. This works out to about $3.50 a year for every school-age child. It may be enough to provide them with a lunch box, but hardly enough to guarantee a classroom and a teacher.

Next month, as donor countries meet at the World Bank and International Monetary Fund spring meetings in Washington, they must take steps to close the multibillion-dollar shortfall in education financing, starting with the first 12 countries whose plans they have already approved under the Fast Track Initiative.

If donors don’t deliver on their promised commitments, the millions of girls and boys missing school today could all too soon be joining the ranks of the 879 million people, or one-quarter of all adults in the developing world, who cannot read or write, and the cycle of poverty will continue.

Donors must come through with the real money to educate the world’s children. And they must start with girls.

Ibrahim Ary is Niger’s minister of basic education and literacy. Zobaida Jalal is Pakistan’s minister of education. Galema Guilavogui is minister of pre-university and civic education, Republic of Guinea. Ann-Therese N’dong-Jatta is Gambia’s secretary of state for education. Fabian Osuji is Nigeria’s minister of education.



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