The Chances for Africa Debt Relief at G8 Summit Debt relief for Africa will be on the agenda when the leaders of the G8 nations meet in Scotland later this week. Kenya, which owes billions to foreign creditors, allocates almost a third of its budget to pay debts. But Kenya is unlikely to have its debts cancelled at the upcoming summit.
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The Chances for Africa Debt Relief at G8 Summit

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The Chances for Africa Debt Relief at G8 Summit

The Chances for Africa Debt Relief at G8 Summit

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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

Debt relief for Africa will be near the top of the agenda later this week when members of the G8 nations meet in Scotland. Kenya owes billions of dollars to foreign creditors and each year allocates almost a third of its national budget to pay its debts. But Kenya is unlikely to have its debts canceled. From Nairobi, NPR's Jason Beaubien explains.

(Soundbite of city sounds)

JASON BEAUBIEN reporting:

Nairobi is a city of some three million people. More than half of them live in the capital's overcrowded, gritty slums. One of the poorest, dirtiest slums is Kora Gocho(ph) which sits next to the city's dump. Smoke from the landfill drifts through the cobbled-together tin shacks leaving a coat of dark soot on almost everything. Polished red tomatoes that women sell along Kora Gocho's muddy main track offer one of the few sparks of color in the dull, gray landscape.

Mr. PAUL MORIRI: (Foreign language spoken)

BEAUBIEN: Paul Moriri, like many of the residents of Kora Gocho, works the dump. At least, that's what he calls what he does every day to survive: work. Like thousands of other people from this slum, he digs through the piles of rubbish at Nairobi's largest landfill searching for food and recyclable materials that he can sell.

Mr. MORIRI: (Foreign language spoken)

BEAUBIEN: `I get everything from the dump,' Moriri says, `clothes, food remains from the rich people in the city.'

Moriri, who's 49, lives alone in a tiny shack down one of Kora Gocho's narrow alleyways. His hut is just large enough for a small table and a platform he uses as a bed. The walls and roof are a patchwork of rusted tin. Moriri says the Kenyan government has done nothing for the people of Kora Gocho.

Mr. MORIRI: (Foreign language spoken)

BEAUBIEN: `We have no water or electricity,' he says. `There's no garbage collection. The sewers are open trenches that run through or along Kora Gocho's narrow alleyways.'

Moriri has to buy water from a tap in the center of the slum and haul it himself back to his shack. And to keep from starving, he searches for food at the dump.

Mr. MORIRI: (Foreign language spoken)

BEAUBIEN: `We are living like animals. If the government had mercy, they'd come and build us houses with electricity and enough water,' Moriri says, `and they'd also find us jobs.'

The billions of dollars in development loans and grants given to Kenya over the last four decades haven't touched Moriri's life. While there are numerous examples of individual aid projects that have improved some people's lives, poverty rates have actually increased in Kenya over the last 15 years. Activists, calling for the cancellation of all of Africa's debt, say that given the enduring dire poverty on the continent, Africa shouldn't be sending billions of dollars each year in debt repayments back to rich, developed nations. Njuki Githethwa, with the Kenyan Debt Relief Network, says for years the West loaned money to corrupt African regimes that weren't responsive to their people's needs or prudent with the borrowed money.

Mr. NJUKI GITHETHWA (Kenyan Debt Relief Network): Well, the reality on the ground is that these roads are not there, the hospitals are not there and all these things that the money was supposed to have done is not there.

BEAUBIEN: Githethwa says the Kenyan people shouldn't be held liable for the debts of a dictator like Daniel Arap Moi. Moi ran the country and ran up huge debts for 24 years. He stepped down at the end of 2002, but the new administration in Kenya hasn't done much better. Corruption is still rampant and the government is still managing to borrow more money from the IMF and the World Bank.

Despite the previous billions that appear to have been squandered in Kenya, Githethwa says canceling Kenya's debts will help alleviate poverty. Kenya spends more each year repaying its debts, he notes, than it allocates for health and education combined.

Mr. GITHETHWA: Last year, it was 1.7 billion US dollars for debt servicing alone. So ...(unintelligible) look at the allocations ...(unintelligible) allocations on education, on health, on infrastructure, you realize there's still a lot of money. And this--if this money is spent to this--these other things I'm talking about, you realize a very big ...(unintelligible) in this country.

BEAUBIEN: But canceling Kenya's debts isn't even on the agenda of the G8 Summit in Scotland. The countries that are being offered debt relief are even poorer than Kenya, more heavily in debt and often unable to meet their loan payments at all.

The criteria for debt relief is primarily whether the country's foreign debt is more than 80 percent of its annual gross domestic product. Kenya's debt amounts to just 40 percent of GDP. Guinea-Bissau's debt, on the other hand, is 400 percent of GDP.

Mutahi Kagwe, the chairman of the finance committee in Kenya's parliament, is critical of the current round of debt relief. He says it's going to countries whose debts are so large they've become irrelevant.

Mr. MUTAHI KAGWE (Chairman, Finance Committee, Kenyan Parliament): A lot of the countries that are being forgiven the money are being forgiven under the guise that this money is going to be used to develop a social infrastructure. The truth of the matter is those nations have not been paying their debts. So it isn't as if there is money they've been paying which is now going to be restructured and put into the social infrastructure. The money is simply not there.

BEAUBIEN: He argues that Kenya has been too good at servicing its debt and would benefit more from debt relief than some of its neighbors. They could redirect the roughly $1 billion a year it's paying now in debt service, he says, directly into social spending.

Kagwe has a point, but Kenya is also an example of how complicated tackling poverty on a large scale in Africa can be. Simply giving billions of dollars to the government, as Western donors did in the past, hasn't improved things for ordinary Kenyans.

Back in the Kora Gocho slum, Margaret Tedja lives in a cluttered, windowless shack adjacent to Paul Moriri. A single piece of corrugated tin serves as a wall between them. Tedja is paralyzed from the waist down and she's dying of AIDS. She says the people of Kora Gocho have been abandoned by their own government, and she's hoping the outside world--by this she means the developed nations--will somehow look after her children.

Ms. MARGARET TEDJA: Because I've seen it, that when you suffer without (unintelligible) nobody loves you. You remain in--poor without your problem being solved.

BEAUBIEN: She has one son, Moses, who's nine and another son Samuel, who's 13. In her current state of health, she can barely support them.

Ms. TEDJA: I really feel I'm this way ...(unintelligible) HIV I speak. I am this way--HIV disease. Do you see, when I die, I don't think there'll be help tomorrow like when I'm alive now.

BEAUBIEN: She worries that when she's gone her sons will end up living on the streets. And in a neighborhood where the only social safety net is the dump, her fears are well-founded. The still unanswered question, however, is whether debt relief could help Kenya or other African nations build a stronger safety net for Tedja's children.

Jason Beaubien, NPR News, Nairobi.

NORRIS: This is NPR, National Public Radio.

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