On Debt, Blair and the Future of Africa

23 December 2005 at 06:15 | 399 views

One of the greatest stumbling blocks to progress in Africa is the continent’s crippling debt burden.Many solutions have been suggested, some implemented, some kept on dusty shelves with no real remedy in sight. Kayode Fayemi reflects on the conundrum.

By Kayode Fayemi

As we await the formal release of UK Prime Minister Tony Blair’s Commission for Africa’s report, it is right that the question of Africa’s odious debt has assumed a central place in the debate with the Global Call for Action against Poverty. But what exactly do we have on the table to guarantee that the Blair Commission as well as a number of other initiatives takes seriously the views from the ground on debt?

It would appear that the Commission’s general thrust on debt is relief, not cancellation. Britain’s Chancellor of the Exchequer, Gordon Brown, is touting the British proposal for developed countries to help finance 100% multilateral debt service cancellation for sub Saharan Africa, with the savings to be channelled into education and health projects. Gordon Brown is also promoting his plan for an International Finance Facility which if successful would result in an immediate doubling of aid from OECD countries, essential to the meeting of the Millennium Development Goal targets. The idea is that donors would make long-term pledges to the IFF extending over 15 years, and these payments would enable the IFF to issue bonds, turning the income into capital available for immediate disbursement.

Even though this has moved the debate closer to what African civil society activists have called for over the last two decades, it is still a far cry from outright cancellation of the continent’s odious debt. For this reason, one is still sceptical about anything short of outright debt cancellation for the continent. Resident in Nigeria, a country whose debt burden has hovered between $32 - $35 billion dollars in the last decade with a poverty profile of seventy percent of its population living below the poverty line and an eighth of its total earnings disappearing into the hole of debt repayments, there is very little that can help Nigeria in Gordon Brown’s proposals. Although it is commendable that the British government is moving beyond the enhanced Highly Indebted Poor Country Initiative (established by the World Bank and the IMF), which failed to provide a realistic and sustainable exit from debt, the current approach remains skewed, disjointed and uncoordinated with other key players and one wonders what is stopping Britain from going the whole way.

Apart from the practical problems arising directly from the continent’s debt trap, there is also a huge moral burden that the debt issue poses for the future of Africa. The bulk of the debt owed by most African countries, certainly by Nigeria, is a carry-over from their authoritarian past - when many of the governments were extensions of metropolitan powers totally unaccountable to their citizens.

Also, the debts were incurred in the heydays of tied aid and dubious loans, in the era of the discredited export credit guarantee schemes. Even if one were to argue that a debt is a debt and any cancellation would result in a loss to those who owe no debt, surely there is a moral responsibility here for the industrial world, given the manner innocent children, most of who were unborn at the time the debts were incurred, suffer untold hardship out of deprivation occasioned by the debt burden.

In any case, we already have a precedence that demonstrates a willingness to cancel debt if it is in the strategic interest of particular powerful countries. Iraq just had $20billion of its debt wiped off in the aftermath of Saddam Hussein’s removal from office. This shows that where there is political will, and citizens’ pressure of governments in the global North is central to this, we should not despair about the ultimate possibility of debt cancellation. In any case, this is increasingly becoming a case of “Can’t pay”, not really one of “Won’t pay” in several African countries. Clearly, poverty - as exemplified by the inequality arising out of unfair sharing of global opportunities - remains the greatest threat to security and democratic consolidation in Africa today and, at the broadest level, globalisation is resulting in deep polarisation between rich and poor throughout the continent.

One’s call for debt cancellation should however not be mistaken for indulgent endorsement of bad and undemocratic governance in Africa. The argument has often been put by some in the West that debt relief or even a Marshall Plan for Africa would not lead to transformational development, allegedly because all the monies would be stolen. This reverse logic is often an excuse for inaction by Western authorities that are themselves indulgent of bad governance in Africa. The story in Africa is clear in the past and even now. Bi-lateral and multilateral agencies continue to seize the momentum provided by the weak capacity of the state to impose received wisdom and new theories of development rather than align external assistance with local needs and efforts and yet turn around to blame the countries in questions for the eventual failure of such policies that they claim to be Africa owned - a claim that is often rejected by many Africans. Where state institutional capacity is weak, an immense burden of responsibility is placed on development partners in which real dialogue with the people and wide consultations (not cosmetic ones a la PRSP) ought to underscore whatever actions are taken.

Ultimately African governments have not performed well over the past decades. The citizens in several African countries are however challenging bad governance in all its ramifications and it is also true to acknowledge that some governments are changing. The problem for them is that there is a limit to how best governments can manage poverty and this is why we need a clean slate on the continent. Only after this would our moral armour be strengthened against bad and unaccountable governance on the continent. Unfortunately, the Blair Commission is likely to fail this test.

* Kayode Fayemi is Director, Centre for Democracy & Development, a research, training and advocacy organisation in West Africa based in Abuja, Nigeria.

Source: Pambazuka News

Photo: Tony Blair