In the Name of Allah, the Beneficent, the Merciful

The Debt Crisis in Africa

[Shamim A Siddiqi, New York]

“In a world where AIDS is claiming more than 8,000 lives a day, and literacy rates are falling, the most impoverished nations are siphoning desperately needed resources for health care and education to continue to pay the wealthiest nations and institutions service on a debt that they have already paid three times over. African nations are at the epicenter of both the debt and the AIDS crises, facing drought and famine and recovering from regional conflict. Despite this reality, African nations are paying more in debt service to the United States and other creditors than they receive in aid, new loans, or investment. The President's AIDS initiative provides a perfect example of this reality. The fourteen countries eligible for funding to fight AIDS, mostly African, will receive $2.4 billion dollars in 2004; the same fourteen nations will pay and estimated $9.1 billion in debt service this year.” [Africa Focus Bulletin]

This quote from African Focus Bulletin of February 8, 2004 presents the grimiest picture  of the condition prevailing in the Continent of Africa about which the G8 nations have agreed yesterday “to write off $40 billion debt owed by 18 mainly African countries, ahead of  the G8 summit”  going to be held at Gleneagles, Scotland in July 2005. “This would save these countries nearly $ 1.5 billion [a drop in the bucket] in debt repayment. It is “considered” as a drive to free Africa from hunger and disease”.

The debt crisis in Africa can well be understood from the following statistics that I am quoting from the same source referred above:

  • Today Africa’s external debt stands at $333 billion. African nations pay $1.51 in debt service for every $1 received in aid.
  • African nations have paid their debt three times over in the past ten years alone, yet African nations are three times as indebted as they were ten years ago.
  • All African countries are paying more on debt service than on health care for their people, regardless of initial and insufficient debt relief. The average spending per person on debt service is $14 per person while the average spending on health is less than $5 per person.
  • If governments invest in human development rather than debt payments, an estimated three million children would live beyond their fifth birthday and a million cases of malnutrition would be avoided.

How much debt was supposed to be canceled, I quote the same source to enlighten our readers that in comparison to what it was incumbent upon the rich nations to day what they have done is simply a “peanut” and they are hiding their faces behind propaganda stunt that they are very “mindful” of the conditions of the poor. They are covering their treacherous game of exploitation of the past, present and the future through the process of Globalization and the so-called open Market Policies:  

  • At the G7 summit in Cologne, G7 leaders committed themselves to canceling $100 billion of the debts of the 42 poor countries included within HIPC. Of this total, $50 billion was to be provided through the HIPC initiative itself; $30 billion from traditional debt relief such as that provided through the Paris Club; and $20 billion from cancellation of aid debts by bilateral creditor countries.
  • *According to the initial schedule, 19 out of the 38 countries deemed to need debt relief under the HIPC initiative should have received initial debt relief by the end of 2002. Total debt relief for these countries, and traditional relief for other countries, should by now have amounted to $68 billion [against 40 billion that they have now earmarked in 2005]

I have no choice but to quote exhaustively from these sources to put the correct picture as what the rich nations were supposed to do in mitigating the loan burden of the poor nations of Africa and elsewhere in the world in comparison to what they are doing or have done so far. Every day the News Bulletin of BBC, CNN and other New agencies around the world are loaded with the grave inhuman condition of African people from Sudan, Rwanda, Ethiopia, Central Sahara region, Somalia and many more, creating a lot of hue and cry that they are starving, no drinking water, no food, no medicine, no shelter, dying in thousands daily with hunger, disease and HIV epidemics. This presentation on their own accord should have been sufficient to convince them to write-off the entire debt of each and every African country. Not only that, they should further provide them with funds, grants and financial support on massive scale, enabling each of them to provide at least  the basic needs to the suffering humanity whose awful picture they never tired of depicting every now and then.    

The G8, the sum total of old colonial countries, have robbed the poor countries of Asia, Africa, Central and Latin America two ways during the days of colonization by plundering their raw material at cheapest price and then dumping these poor countries of their finished products at the most exorbitant prices. Thus, “looting” them in two ways, they left them and their skeleton bodies overburdened with loan at a very high rate of interest, living them to live and die constantly with beggar’s bowl with no blood in their cheeks and no money to pay even their Debt Servicing charges on the accumulated loans that now amounts to more than 300 Billion dollars. The rich have reached the stage of
”over-capitalization” while rendering the poor with only empty handed bowl. Globalization, Open Market economy and control through WTO and IMF are just to perpetuate that one-sided flow.

Now the rich nations of the world know that the poor countries of the world cannot pay any more. No blood is left in their skeleton frame. They are just brook. They are throwing some “pieces” of dry bread in their bowl to make them stand on their trembling feet making them easy to fall  back in their “hunting” net of Globalization and get them entrapped in their open market plan for plundering them again in different names and games. Germany and Japan are still not willing to give up their loans though both are aspiring to be permanent members of the SC.

Under this miserable condition, world economy is bound to collapse one day with a great thud. It is inching towards that catastrophe and no amount of “patching” device can save it from collapse. It is all a fraudulent game of tyranny, the game of exploitation of the poor and of have-nots by the haves. It cannot survive long. The Creator and Sustainer of this cosmos abhors it.  So it is bound to collapse one day. Only a magnanimous attitude of the rich for the poor and sharing their past booties with the poor and have-nots can redeem its future.


Shamim A Siddiqi

Dated: June 13, 2005