Gauging the Effect of Debt Relief on Africa

Wealthy Western nations promised at last year's G-8 summit to forgive the debt of many African nations. Renee Montagne speaks to Richard Dowden, director of the Royal African Society, about what effect the promise has had.

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RENEE MONTAGNE, host:

President Bush is in St. Petersburg, Russia, for a meeting of the world's wealthiest nations. The Group of Eight Summit begins tomorrow.

Top issues include the Middle East, North Korea, and energy security. That's a very different focus from 2005. British Prime Minister Tony Blair called that the year for Africa, when countries boosted aid to African nations.

To discuss how last year's promises of increased aid, debt relief and trade have effected poverty in Africa, if at all, we called Richard Dowden. He is director of the Royal African Society, which studies and advocates for African issues. Welcome.

Mr. RICHARD DOWDEN (Director, Royal African Society): Hello.

MONTAGNE: The G-8 countries agreed to cancel $40 billion in debts owned by the poorest nations, mostly in Africa. What happened?

Mr. DOWDEN: Well, they've forgiven the debt of 19 countries, about 14 of them in Africa. These are the poorest countries of all, plus Nigeria, that had a big debt problem. Now these are the debts that are owed to the international financial institutions, the IMF and the World Bank and so on. They've written off those debts.

Now, that's quite a good thing, but many of these debts weren't being serviced anyway, so they don't save these countries very much. Nice, but not terribly significant.

MONTAGNE: Receiving nations were also supposed to crack down on corruption and adopt good government practices. Did they live up to their end of the bargain?

Mr. DOWDEN: I think some of them have, and haven't immediately gone, thank you very much for canceling that debt, I'm going to go and collect some more and then deposit it in a Swiss Bank account, which is the way it used to happen. There's not so much of that these days.

However, the picture is extremely mixed. I mean, some have even gone backwards. Uganda and Ethiopia, who were both the darlings of the donors, they were receiving lots of money in aid, had their aid cut because they cracked down politically on their opponents. Other countries, Zambia, Ghana, are doing much better.

Certainly Nigeria had its debt forgiven and it has actually made a lot of progress. It cut down on corruption. There was a lot more transparency, a lot more accountability. But the problem is that next year, President Obasanjo is stepping down and there'll be an election, and that will open up all sorts of terrible problems in Nigeria. It'll produce a lot of chaos in the country.

MONTAGNE: The G-8 countries also agreed to increase aid to Africa to $50 billion a year by 2010. Are they on track to reach that goal?

Mr. DOWDEN: Some of them are. France has delivered, and Britain is only very slightly behind. But others have actually flatlined. Germany and Italy have actually reduced aid in 2005 to Africa. The United States is about half a billion short of what it should be at if it was going to hit that target that it promised to.

MONTAGNE: You know, one of the biggest arguments, and that some economists make, is that wealthy nations could help reduce poverty in Africa by eliminating the billions of dollars in subsidies that they give their own farmers, which would then help the African farmers, who could produce and export. Has there been any movement on that front?

Mr. DOWDEN: Almost nothing. This was the big one. This is the one that, if it happened, would allow Africa to earn its living in the world. Now, immediately, if there was a complete free trade in the world, Africa would actually suffer, because it is given some concessions at the moment. But in the longer term, it is trade that will allow Africa to develop. And that's where there's been absolutely no movement at all.

MONTAGNE: Thank you very much for joining us.

Mr. DOWDEN: Okay. Thank you.

MONTAGNE: Richard Dowden is director of the Royal African Society, speaking from London.

(Soundbite of music)

MONTAGNE: This is NPR News.

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