American Friends Service Committee
February 1, 2004

Without doubt, the Iraqi people deserve a reprieve from debt. But Africa’s predicament doubles Iraq’s many times over. In Africa today, millions have been killed, and are routinely wounded, raped and displaced from their homes and means of livelihood by war. This breakdown of Africa’s social fabric exacerbates an already desperate situation characterized by grinding poverty, famine, dismal health care facilities and rising illiteracy and unemployment rates. In recent years, an estimated 3.3 million people have been killed and 500,000 displaced by the civil war in the Democratic Republic of Congo. “The World Food Program warns that nearly 40 million Africans are struggling against starvation”¹ and almost 30 million have contracted HIV/AIDS.

Suddenly, the US is pushing to cancel Iraq’s $400 billion total debt. The Iraqi people certainly deserve it. But why is it proving so hard to cancel the $300 billion sub-Saharan Africa owes? – Jubilee UK Debt Campaign

It is ironic that while Africa is the world’s poorest region, the continent carries two-thirds of the Global South’s (Third World) debt burden – an estimated US$300 billion. Studies show that by the end of 2004, Africa will be spending about 70% of its export earnings on external debt servicing, leaving even less funds for biting health, educational, agricultural, food security and other basic needs. The average African country spends around US$15 per person on debt repayment and less than US$5 per person on health and educational services. This means Africa spends three times more on repaying debts to rich countries and institutions than it does on providing anti-retroviral and other health facilities and drugs for its sick and poor population.

Illegitimate and Odious Debt

It is universally agreed that the bulk of Africa’s crippling debt is illegitimate and often falls within the legal definition of “odious.” Africa was literally snared into debt by creditors in the wake of rising oil prices and falling interest rates in the 1970s. Banks and other lending institutions made loans to Third World countries in order to “stop the slide of interest rates and thus save their businesses. These lenders had little regard for the borrowing countries’ ability to repay or to what use these borrowed funds were being put. Such irresponsible lending resulted in corrupt African leaders and governments grabbing as much money as possible to line their pockets, stash away in foreign bank accounts, invest in useless prestige projects, buy more arms and fortify their brutal security apparatuses which they then used to crush dissent, perpetuate themselves in power and create the conditions for the violent conflicts that today ravage the continent. Thus, the criminal apartheid regime in South Africa continued to receive massive amounts of debt which it used to oppress and kill South Africa’s black majority. So did the notoriously corrupt and brutal Mobutu regime in the former Zaire. Forcing the poor peoples of these countries to pay debts used to oppress, kill and leave them with such bloody legacies is simply unjust.

During the Cold War, Africa was a hot battle ground for the former USSR and the West, principally the United States. Both East and West furiously fought for the soul of the continent and disbursed billions of dollars in debt to any country that supported them, regardless of how brutal their leaders were or how bad their governments. Thus, the creditors were literally paying for the political support they received. Therefore, present day Africans should not be forced to pay for services already rendered by Cold War era regimes.

Structural Adjustment Programmes

In disbursing new loans, the IMF and World Bank imposed crippling conditionalities called Structural Adjustment Programmes on debtors. These required countries seeking loans to:

• Cut spending and subsidies on basic public services such as health and education, thereby making them more unaffordable to the ordinary people;
• Cut down the size of government by retrenching (laying off) thousands of workers, thereby raising the unemployment and poverty index several notches higher;
• Privatize state owned institutions thereby making the goods and services more expensive and unaffordable to a greater number of people;
• Devalue their currencies thereby making exports cheaper and imports more expensive.Such “austerity measures” only worsened the poverty situation in Africa. It is noteworthy that the IMF and World Bank make no demands concerning military spending and ask few questions concerning applicants’ creditworthiness.Shared Responsibility

  Creditor nations and institutions claim that Africa is totally responsible for the continent’s debt crisis. Empirical evidence, however, shows that creditors:

• Made loans without regard to the use to which the loans were to be put;
• Had no debt evaluation processes;
• Were only interested in getting surplus monies out there to gather interest;
• Made loans to illegitimate leaders and governments whose downfall was a foregone conclusion and therefore clearly predictable; and
• That, according to international law, people should not be forced to pay debts that did not benefit them and that were contracted and used to suppress, jail and kill them.Apart from the fact that Africa’s debt is both illegitimate and odious, evidence shows that many African countries have paid their debts many times over. For example, according to Jubilee USA, Nigeria borrowed $5 billion, has so far paid over $16 billion and still owes $32 billion on that same debt! This absurd scenario is representative of all indebted African countries. Which is why we ask: Who Owes Whom?¹ New York Times Magazine, “Why People Still Starve,” Barry Bearak, July 13, 2003

  *Note: All figures are for US dollars.