On October 14-21, 2007, thousands of activists and debt campaigners from at least 297 national organizations and 24 regional & international formations in 60 countries across the world participated in the Week of Global Action against Debt and the International Financial Institutions (IFIs).This Week of Global Action coincides with the World Food Day on October 16, the UN International Day for Eradication of Poverty October 17, and the Annual Ministerial Meeting of the International Monetary Fund and World Bank in Washington, DC, from October 20-22, 2007.

Debt burden has greatly impacted the economic independence and political autonomy necessary for development in Africa.  African governments are forced to repay billions of dollars to wealthy nations and institutions in the West such as the World Bank and IMF while millions of African people continue to die from starvation and disease. A high level of external debt, as seen in many African nations, greatly limits the ability of poor countries to pursue sustainable development and reduce poverty.

In response, the World Bank and the IMF launched the Initiative for Heavily Indebted Poor Countries (HIPC) in September of 1996. According to the World Bank, HIPC debt is 45 percent multilateral, 45 percent bilateral, and 10 percent commercial.  The Initiative is designed to reduce debts to sustainable levels for poor countries that pursue economic and social policy reforms. It is open to the poorest countries that are eligible only for highly confessional assistance from the World Bank's International Development Association (IDA) and the IMF's Poverty Reduction and Growth Facility. Under the enhanced HIPC framework 23 countries have qualified for this relief and 19 of them are from Africa. They are expected to yield more than $34 billion in debt service relief over time. A World Bank record indicates that Africa spends about $15 billion per year on debt repayments but receives only $12.7 billion in aid per year. According to the African Partnership for Development (NEPAD) Africa’s total debt stands at $300 billion.  For every $1 African countries receive in grants, they pay $13 in interest on debt.

The HPIC Initiative was meant to alleviate the debt burden carried by the world’s poorest countries but has fallen far short of expectations. Only five African countries—Uganda, Mozambique, Tanzania, Burkina Faso, and Mauritania—have reached the “completion point” under the HIPC Initiative. Furthermore, of Africa’s $300 billion debt, creditors have agreed to cancel only about 15 percent ($50 - $60 billion).

African countries facing debt problems have been calling for total cancellation since the burden of debt repayment will be at the expense of providing its  people with social amenities. Nigeria recently made a payment of $12 billion in order to secure relief from its Paris Club debt. The completion of the deal, which saw Nigeria exit from $30 billion of debt, is commendable according to experts because “it will allow the government budget to focus more on promoting private sector growth and development.” But, the population is groaning under extreme poverty and hunger that has never been experienced before in the country’s history.

More pertinent now is Liberia’s debt. Its government borrowed most of the money in the early 1980s, and has not been paid since 1984. The debt now stands at $4.5 billion, equivalent to 3,000 percent of exports, the highest ratio in the world. Creditors expect Liberia to begin servicing its debts at a cost of $80-100 million per year. Since Liberia’s annual government budget stands at $80 million, fully servicing these debts means that the country’s entire budget would have to be paid to its creditors.

A pledge by major creditors to forgive Liberia’s debts has been suggested but the process is stuck at the IMF, where the Board has been debating for a full year how to share the costs of the write-off. The Freedom from Debt Coalition (FDC) together with various civil society organizations and other progressive groups will be joining a seven-day event under the theme “Week of Action Against Illegitimate Debts, Unfair Trade and Worsening Poverty.”

In the US, Jubilee campaigners rallied support for the Jubilee Act through a 40-day rolling nationwide Cancel the Debt Fast which started on September 6 and lasted through October 15, 2007. On the last day of the Fast, the Senate announced its own version (S.2166) of the renowned House Jubilee Act (H.R.2634), thanks to the efforts of Jubilee activists. In addition, the Global Call to Action against Poverty (GCAP) and the UN Millennium Campaign spearheaded STAND UP and SPEAK OUT against poverty and inequality on October 16th and 17th. AFJN joins other international organizations in calling on the IMF to take action now to save the poor countries from slipping into a state of anarchy because of poverty and acute lack of infrastructure.

-Joseph Effiong