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UN Urges African Governments to Better Deal with Debt Payments - 2003-11-18


The United Nations is calling for African governments to deal better with their loan payments. The appeal was made at a two-day forum in Senegal.

African governments have piled up billions of dollars in foreign debt since the 1960s and 70s and spend a large portion of their annual budgets servicing those debts.

For 30 African countries, mostly in sub-Saharan Africa, debt exceeds 150 percent of total exports.

At a two-day economic forum in Senegal's capital, Dakar, discussions focused on ways to eliminate these crippling external obligations.

The economic and social policy director of the U.N. Economic Commission for Africa, Patrick Asea, said governments should first avoid misguided spending and focus instead on alleviating poverty. "Debts have been incurred for non-positive investments. A lot of debt has been incurred for military spending and non poverty-reducing issues so what we are looking for is a much more responsible, well-managed African economy as we go forward in the next 20 [to] 30 years," he said.

The head of the U.N. Economic Commission for Africa, Kay Y. Amoako, said African governments also need to invest more of their money inside the continent. "A lot of money is getting out of Africa through corruption, through all sorts of practices. About a third of Africa's private worth goes out of this continent so we also need to stop that. And the way we stop that is to bear confidence in our economies so that our own people want to invest their own resources, have political stability, have good governance, so our people can believe in our nations and keep our money where we should keep our money," he said.

But a Nigerian official in charge of relations between his government and the United Nations, Isaac Oluko-Olokun, said the U.N. should also pressure international lending institutions for debt relief.

He said Nigeria is a good example of a country that has improved its governance, yet is unable to cope with its debt burden. "This year Nigeria is supposed to service its debt by about $3 billion. It is not sustainable. If Nigeria is to be able to grow, the creditors must muster the political will to be able to give more relief," he said.

Some participants at the Dakar talks say the Heavily Indebted Poor Countries Initiative launched by the World Bank and the International Monetary Fund in 1996 is helping, but it needs to be reinforced.

In 1999, industrialized countries and financial institutions improved the debt relief package for about 40 of the world's poorest states, more than 30 of them in Africa. In return, many of these countries have adopted policies to promote growth and foreign investment.

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