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Africa: Debt Statements
Africa: Debt Statements
Date distributed (ymd): 980325
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+ +US policy focus+
Summary Contents:
This posting contains a statement by the Uganda Debt Network, presented
to African heads of state meeting with President Clinton this week, and
a briefing statement by Oxfam International on President Clinton's trip,
highlighting debt and other issues. Additional information on Africa and
the need for debt relief/cancellation is available on the Africa Policy
Web Site (http://www.africapolicy.org/action/debt.htm).
+++++++++++++++++end profile++++++++++++++++++++++++++++++
UGANDA DEBT NETWORK
P.O BOX 21509
KAMPALA Uganda
Tel/Fax. 256-41-223152 or Fax: 256-41-220197
Offices: UCIL House, UMA Showground, Lugogo
E-mail: [email protected]
PRESS RELEASE
To: The African Heads of State and Government of:
Congo, Eritrea, Ethiopia, Kenya, Rwanda, Tanzania, Uganda, Zimbabwe,
And The OAU Secretary General.
We, the members of Uganda Debt Network, a coalition of Uganda NGOs,
Instutions and individuals, welcome the African Heads of State and Government
and The OAU Secretary General to the Kampala meeting with President Clinton.
The meeting should be used to obtain concrete results that can translate
into significant changes in the social and economic development of Sub-Saharan
Africa.
The members of the network are concerned that:
The countries you represent are some of the highly indebted poor countries
and have some of the lowest social indicators in the world. This is where
43% of the population of 15 years and above are illiterate. Out of these
52% is female and 33% is male. Although it has a large land mass of 23,628
square kilometres, it is highly dependant on food aid and the region is
the most vulnerable to the vagaries of weather.
The region is home to over 600m people where women, youth and children
form the bulk of the population. Life expectancy in this region is a mere
52 years. Over 73% the population live in the rural areas eking out a bare
existence. The average national income from the sale of goods and services
per person per annum in the region is a mere 481 dollars.
Sub-Saharan Africa owes a total of US$235 billion. Out of this amount,
US$182 billion is a long term debt which is payable over a period more
than 10 years. The external debt will only be repaid by sacrificing the
health and education of poor people in your countries. This means that
poor people in our countries will remain in debt bondage for much of their
lifetime.
Sub-Saharan Africa continues to pay out large amounts in debt service.
For instance, while it received US$15 billion in loans in 1996, it paid
out US$ 12billion in debt service.
The large external debt of Sub-Sahara African countries is hampering
foreign direct investment, economic growth, employment and is a stumbling
block to sustainable development. The external debt burden impedes social
development and stifles consumption of poor people.
The highly indebted poor countries (HIPCs) debt relief initiative sponsored
by the World Bank and IMF is not a comprehensive strategy to deal with
our external debt burden and will not have impact unless:
(1) The period between the decision and completion point is shortened.
(2) The funds for debt relief are provided to the countries within a
shorter period (less than six years) to enable them undertake their social
development programs and to improve the quality of life of the people.
(3) The management of the few available resources involves the participation
of the ordinary people themselves who are the target for the development
programs.
(4) The resources from debt relief are targeted towards poverty eradication,
improved health and education of poor people.
African Heads of State have not shown strong support for the NGO's international
campaign for total cancellation of debt of poor countries that would give
a new start to the people. The world-wide campaign aims to ensure that
creditors write off the massive debt of poor countries in Sub-Saharan Africa
which is choking their development.
APPEAL
We therefore appeal to your Excellencies to use this opportunity to:
- Firmly put your position behind accelerated debt relief for the struggling
economies of Sub-Sahara African countries.
- Urge the US President to give a firm commitment to influence international
financial institutions and creditor countries to accelerate debt relief
for Sub-Sahara African countries.
- Obtain President Clinton's support for the Jubilee 2000 International
campaign for total cancellation of external debt of Sub-Saharan Africa.
The concerned members are:
CECORE, OXFAM, UWONET, DENIVA, UWESO, ACTIONAID, ACORD, UWFCT Ltd.,
HURIPEC, VINLAW Ass. LTD., DRT, WORLD VISION, UMWA, DWNRO, EPRC, OSCA,
ACFODE, Makerere University Business School, Dept. of Political Science-Makerere
University, R. Zedriga, Maude Mugisha, Joseph Okune, MUDDA, MS-Uganda,
May Sengendo, Waswa Balunywa, Nuwa Mwesigwa, Zie Gariyo, Mathias Mulumba,
Vincent Edoku, Ann Kamya, Lena Komushomo, Stella Kyakuhaire, URDT, NUDIPU.
OXFAM BRIEFING STATEMENT
PRESIDENT CLINTON'S TRIP TO AFRICA
MARCH 23, 1998
For more information contact:
Justin Forsyth, 202.393.5332 <[email protected]>
Lydia Williams, 202.783.7305 <[email protected]>
Graham Saul, 258-1-304674 <[email protected]>
Trade and private investment are not enough--investing in Africa's people
is an essential complement if all Africans are to benefit from these new
opportunities. President Clinton must use the considerable influence of
the United States to promote partnerships with African governments focused
on investment in Africa's greatest resource -- its people, by taking action
to;
- provide leadership to end Africa's debt crisis
- to reverse the decline in aid to Africa for poverty alleviation
- mobilize global action to get all African kids in primary school
- measure trade success by impact on African people not just US business
Oxfam welcomes efforts by President Clinton to seek a new relationship
with Africa based on greater trade and investment. Greater opportunities
for trade and investment are essential to Africa's long-term development.
Yet by itself, Clinton's "Partnership for Economic Growth and Opportunity"
initiative will yield only modest results in Africa, where roughly half
the population live on less than one dollar a day. The initiative must
be coupled with bold actions to create an enabling environment in which
all Africans can benefit from new opportunities.
Perhaps the biggest obstacle to attracting investment and improving
the lives of Africans is the region's massive foreign debt. Yet, in contrast
to the vigor with which the U.S. has reacted to the crisis in East Asia,
the Clinton Administration has moved too slowly and timidly to deal with
the urgency of Africa's debt crisis. If President Clinton wishes for his
trip to Africa to be truly historic, he should use it as a platform for
generating the political will -- here at home and internationally -- that
is necessary to tackle the debt problem and reverse the declining human
welfare of most Africans before the next millennium.
BACKGROUND
Education is the key to poverty reduction
The single most important investment a country can make is in the education
of its people. In an increasingly knowledge-intensive global economy, where
human resources are of greater importance, access to education is becoming
a central determinant of economic growth and poverty. Sadly, half of all
African children do not attend primary school and Africa is the o nly developing
region in which school enrollment rates are actually declining. Currently,
44 million African primary school aged children do not go to school; that
figure is expected to rise to 59 million by the year 2000. The single most
important variable in the different growth rates of East Asia and Sub-Saharan
Africa is primary school enrollment. Africa's crisis in education must
be addressed now if it is to attract investment and reverse the widening
gap between it and the rest of the world.
Massive debts are robbing the future of African children
While African countries face educational decline, their foreign debts
continue to mount. Sub-Saharan debts total about $223 billion. Currently,
African countries are only able to pay one-half of scheduled payments.
And yet, debt service still represents one-fifth of the region's foreign
exchange earnings. These debts are a formidable deterrent to private investment,
and threaten higher inflation, increased taxation, and access to vital
imports necessary for investment.
The costs of these debt payments are borne by the most disadvantaged
of Africans. Foreign debt forces poor countries to divert scarce resources
away from health, education, and other human resource investments, representing
an unacceptable waste of human potential. President Clinton will not have
to look far to see the havoc that debt has wrought in the countries he
will visit. In Uganda, 800,000 children or one third of all children do
not go to school. Yet the government's debt payments are seven times what
it spends on primary education.
For less that what is being spent on debt, it would be possible by the
year 2000 to make social investments which would save the lives of some
21 million African children and provide primary education to 90 million
children.
The US resolve displayed in Asia is sorely lacking in Africa
In September 1996, the United States played a leadership role in pressing
for an international agreement on debt - the Highly Indebted Poor Country
Initiative (HIPC). This initiative aims to reduce the debt of some of the
poorest countries in the world to sustainable levels through bilateral
and multilateral creditors such as the World Bank and the IMF acting together.
In sharp contrast to the economic crisis in East Asia, where the US
and its allies mobilized $100 billion and bent IMF rules, raising the $7
billion needed to grant relief to roughly 20 countries under HIPC has been
fraught by internal squabbles, disputes over eligibility, and outright
opposition among some creditors. At the current pace, only three African
countries Burkina Faso, Mozambique, and Uganda will receive relief before
the year 2000.
While the United States has supported debt relief in concept, its actions
during the secretive proceedings of the Paris Club and IMF and World Bank
Board meetings have been problematic. The U.S. insistence that countries
demonstrate their commitment to strict IMF conditionality before receiving
relief has meant costly delays in badly needed relief. In spite of Uganda's
exemplary record on economic reform and its pledge to translate debt relief
into education for disadvantaged children, the US argued that Uganda should
wait a full two years before receiving relief. The U.S. position effectively
played into the hands of powerful opponents of relief such as Germany,
Italy, and Japan; in the end, Uganda was made to wait one year which resulted
in it receiving $193 million less than if it had received immediate relief.
A more recent case where the United States leadership was lacking was during
negotiations over how to reduce the $5.5 billion debt burden of Mozambique.
One of the poorest countries on earth, Mozambique is emerging from a 16
year civil war which destroyed two thirds of its primary schools and a
third of its health centers. In order for Mozambique to reach a sustainable
level of debt, each bilateral creditor had to agree to forgive 90% of its
share of Mozambique's debt. But action was delayed by squabbling within
the Paris Club between G7 countries. In stark contrast to the high-level
attention to the situation in Indonesia, where were the phone calls to
G7 countries who were blocking progress?
In addition to debt relief, bilateral and multilateral aid is also an
important means for mobilizing resources for human development. Investments
in education and health provide the building blocks for equitable growth
and help to attract investment. Poor countries can not rely on market forces
to provide these. Well-targeted aid can help to create a secure foundation
for equitable growth and poverty reduction. Unfortunately, US aid to Africa
has declined by some 25% in recent years, and the "partnership"
initiative fails to reverse these trends nor protect aid to the most needy
countries, which includes several African countries.
OXFAM RECOMMENDATIONS
President Clinton's historic trip has the potential to mobilize broad
support for reducing poverty in Africa.
We urge Mr. Clinton to use his influence to:
- Provide global leadership to end Africa's debt crisis
The Partnership initiative offers very little new debt relief. Mr. Clinton
should pledge to forgive all U.S. bilateral debt to all HIPC countries,and
challenge other creditors to follow suit. The U.S. should provide even
deeper debt relief for countries committed to a"debt for poverty reduction"
contracts which would translate debt relief into human development investments.
- Reverse the decline in aid to Africa for poverty alleviation
President Clinton should work with Congress to reverse the decline in
aid to Africa, and to improve its poverty focus. Expanding poor people's
accessto health, education, credit, and other productive resources should
be a priority. Aid is also vital to helping African countries overcome
obstacles (such as high transport costs, limited access to technology,
and poor infrastructure) that prevent them from competing in the global
economy and from taking full advantage of U.S. trade preferences that already
exist.
- Mobilize global action on getting all African kids in school
Mr. Clinton's trip offers an excellent platform for rallying support
for achieving the internationally agreed target of universal access to
primary education by 2015. President Clinton should work with African leaders
to launch a global action plan, committing donors and developing country
governments to mobilize the necessary resources through aid, debt relief,
World Bank lending, greater national government spending, and protection
of education and social expenditures during the economic reform process.
- Measure trade success by impact on African people not just US business.
The success of the Partnership must be based on its ability to help
Africa compete in the global economy and to improve the welfare of its
people. The initiative should set realistic targets to achieve these goals.
Please see our website www.oneworld.org/oxfam
for reports on debt and poverty, including: "Debt Relief and Poverty
Reduction: New Hope for Uganda", September 1996 "Poor Country
Debt Relief: false dawn or new hope for poverty reduction?", April
1997 "Growth with Equity: An Agenda for Poverty Reduction", September
1997
Oxfam is an international aid agency working with grassroots organizations
in 120 countries to combat poverty and injustice.
This material is being reposted for wider distribution by the Africa
Policy Information Center (APIC), the educational affiliate of the Washington
Office on Africa. APIC's primary objective is to widen the policy debate
in the United States around African issues and the U.S. role in Africa,
by concentrating on providing accessible policy-relevant information and
analysis usable by a wide range of groups individuals.
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