discussion Now, the question is, should this debt be cancelled? What is your gut feeling? Before answering this question, let us read up on this issue from proponents and opponents of cancelling Sub-Saharan Africa’s debts

Friends, Let us discuss another complex issue of our time, the debt crisis in Sub-Saharan Africa. Up until 1970, Sub-Saharan Africa’s total external debt was just under $11 billion. However, between 1970 and 2002, Africa received $540 billion in loans, mostly from western banks and countries. “Despite the fact that over that same period, African countries paid back $550 billion [principal and interest] —$10 billion more than the original loans—at the end of 2002.” Regardless, they still have more than $300 billion debt burden. Obviously, debt of this size is a major obstacle to Sub-Saharan Africa, whose Gross National Income is $1,970. Life expectancy of this continent is 47 for male and 49 for female. Infant mortality is 98 per 1, 000 births; while child mortality is 164 per 1,000. (164 children out of 1,000 die before reaching the age of five.) This is in every sense of the word, an underdeveloped geographical realm and its external debt is closely related to that. Now, the question is, should this debt be cancelled? What is your gut feeling? Before answering this question, let us read up on this issue from proponents and opponents of cancelling Sub-Saharan Africa’s debts. The following is what I got from the website of “Africa Action,” an advocacy group supporting debt cancellation as first of the solution to Africa’s poverty and other social and economic woes.

Africa’s Debt Crisis * Africa’s external debt burden currently stands at more than $300 billion, in a continent where most people subsist on less than $1 per day. * Africa’s debt crisis is the single biggest obstacle to the continent’s development and to the fight against HIV/AIDS. It represents a crippling load that undermines economic and social progress. * African countries spend almost $15 billion each year repaying debts to the World Bank and International Monetary Fund (IMF) and other creditors. * Servicing these debts diverts money directly from spending on health care, education and other important needs. While African countries struggle to cope with the devastating effects of the HIV/AIDS crisis, they are currently forced to spend more money on debt repayments than on health care for their people. * This year almost 3 million Africans will die of AIDS. 500,000 African children will die of malaria. These deaths could be prevented if African governments could spend more money on health care than on debt repayments. * It is estimated that African countries pay $1.51 in debt service for every $1 they receive in aid. Illegitimate Debt

* Most of Africa’s foreign debt is illegitimate in nature because of the circumstances under which it was incurred, as well as the harmful effects it now has on the continent’s development. * Much of Africa’s debt was incurred by unrepresentative regimes during the era of Cold War patronage, when loans were made to corrupt leaders who used the money for their own personal gain, often with the full knowledge and support of lenders like the U.S. government and the World Bank and IMF. [For example, in the Democratic Republic of the Congo (DRC), formerly Zaire, dictator Mobutu Sese-Seko received more U.S. aid than the rest of Sub-Saharan Africa combined during much of the Cold War, even though it was well known that this money was being diverted into his Swiss bank accounts. The people of the DRC should not now have to pay back loans from which they saw no benefit.] * In many African countries, debts were contracted by repressive or despotic regimes and used to strengthen the hold of that regime, contrary to the interests of the nation and its people. These are considered illegitimate “odious debts”, and this is an established legal principle. [For example, in South Africa, the apartheid regime took out more than $18 billion in foreign debt in its last 15 years in power. The people of South Africa, the victims of the apartheid regime, should not now be forced to pay the cost of their own previous repression.] * In many African countries, debts have swelled over time because of high interest rates and other conditions imposed by creditor governments and banks. These debts are illegitimate, since the original debt has already been repaid many times over. * Many African activists and advocacy groups question the notion of an African “debt” to the U.S. and European countries after centuries of exploitation and plunder. They consider all of Africa’s debts illegitimate and ask, “Who really owes whom?”

So, what needs to be done? “Many economists, and non-economist, such as Bono of the band U2 calls for, as first step, ‘100% debt cancellation… so that countries can begin putting their savings to use.’ They argue that this is not impossible a goal because the cost of cancelling 52 of the most indebted countries in the world is ‘only one penny a day” for each person in the industrialized world.

Now, that sounds noble and revolutionary. However, there is also a counterargument to debt cancellation. Here are two articles insisting that the Africans need to clean up their acts first.

Debt relief no solution to Africa’s woes By James Shikwati Having traversed most continents of the World, I find it difficult to believe that rich nations are honest in their quest to cancel poor nation’s debts. That, countries that preach democracy, rule of law, good governance, and accountability, can cancel debts without outlining the type of transactions that led to the debts is strange. Have any of the citizens in the countries earmarked for debt cancellation asked their governments for an audit report?

Foreign aid was meant to fill the gap between domestic savings and investment. It was based on misconceived theory of cycle of poverty, which was believed to rely on external injections in order to break the cycle. Over 40 years of injections and the ‘cycle’ goes on. Presently, developed countries have spawned the most absurd theory popularly referred to as the ‘Power of the Star’. In this approach, countries are divided into four, the stars, the squares, the circles and the triangles. Each country is assigned a certain value, for instance, the industrialised counties have the highest value and the poor nations have the lowest value. With this approach, only the wealthy nations can salvage countries that have low value. To validate this argument, poor country elites are normally trained to believe in foreign support as the main way to get out of underdevelopment.

It is estimated that for the last 40 years African leaders have stolen and stashed more than US$140 billion in accounts held in developed countries. African countries owe wealthy nations an estimated US$295 billion. Rich nations have resolved to cancel debts amounting to US$40 billion. In the short term, a few countries that benefit from debt cancellation might put up hospitals, hire teachers, nurses and fall back in debt again. What the proponents of debt cancellation do not tell the World is who benefited from these transactions.

To a large extent loans from rich nations have been tied with conditionality, which lead to an estimated two-thirds of the amount borrowed flowing back to donor countries in purchase of machinery, hiring of expatriates, procurement and trade policy controls. The little that seeps in to the recipient is in turn stolen by the leadership and banked in the very same developed nations. Is it possible for the citizens of the poor nations to take wealthy nations to the international court for knowingly handling stolen property?

Modern international banking regulations are keen to watch out money transfers that could be linked either to terrorists or drug traffickers. Developed nations will do a great service to the poor by reviewing accounts of the African leadership they very well know embezzle money from their subjects. In 2004, an African Union report indicated that Africa loses US$148 billion in corrupt practices alone. Other reports have shown that Africa loses US$20 billion through capital flight, US$15 billion on civil war

damages, US$ 18 billion on food imports, US$ 15 billion on expenditures on arms and military, and US$ 216 billion on other leakages.

How much aid do we African need to obey our own laws, to shun corruption and to simply put our priorities right? The African peasant is being milked by both her leaders and developed nations. The peasant is fighting to get proper representation in parliament and to have her productivity rewarded by the market. Nevertheless, wealthy nations impose farm subsidies, flood markets with subsidised products leading to unfair competition. Wealthy country intellectuals are lobbying to ensure that people from poor countries do not utilise their natural resources such as fossil fuels, forests and wildlife among others. Elites from the developing countries are busy colluding with wealthy nations to rob the peasants either through inflated contracts or simply implementing policies they know will never work.

Rich nations strategically teach poor nations to rely on aid for reasons unknown to the aid recipients. The daily struggles of African farmers whose crops are destroyed by pests, communities that go without water, and families that seek medicines as their children perish due to preventable diseases such as malaria go unnoticed. Africa is endowed with minerals such as tantalite, vanadium, palladium, uranium, chromium, oil and diamonds. A good portion of Africa has good soils and fair climate. Africa is not over populated compared to Asian countries. The full potential of the African people has not yet been tapped especially that of women and the youth.

Instead of being hoodwinked by sexy good-looking ideas such as debt relief, Africa should urgently turn inward for solutions to her problems. We must open up Africa to African business people and other innovators. We must ask our friends from developed nations to allow us to travel and learn. We must learn to do business with the developed nations and steer clear-off the manna from heaven relationship. There is optimism that an emerging new generation of Africans will save this continent from the perpetual fixation on life support machine in the name of aid. African leaders are facing the toughest challenge, they have either to offer leadership or simply act as supervisors for wealthy nations’ interests.

Debt relief or cancellation is not the solution: good governance is

By Wudu Lado

While calls across the globe by Live 8 musicians, concert organizers and other African sympathizers for debt relief or out right cancellations and more aid to Africa are commendable, such actions are not going to alleviate the rampant poverty we see in Africa today. The widespread poverty is due to a combination of kleptocracy, mismanagement and plunder of the continents resources coupled to bad governance by the continent’s finest - the ruling elites. It seems that those who were tasked with guarding state coffers could not resist the urges and temptations to dip their sticky hands into the treasure and rob the continent blind. Forgiving or cancelling Africa’s debts and increasing its foreign aid is not the answer if the underlying problems that cause the existing poverty, in the first place, are not addressed. Such actions will only serve to reward and embolden Africa’s ruling elites to continue stealing from state coffers. Furthermore, such actions (debt forgiveness or cancellations and foreign aid increments) will only serve to foster more dependence and reliance on foreign aid. Good governance, that is answerable and responsible to the African electorate, is the key to uplifting Africans from the cesspool of poverty.

It is not that Africans are incapable of good governance rather the ruling elites in Africa have denied Africans the opportunities to exercise good governance. Most often these cliques are made up of a cabal of opportunists who use tribal politics to entrench themselves in power and further their agenda of fleecing the state and driving the country into poverty in order to solidify their grip over the government. This clique has neither developmental agenda nor the people’s welfare at heart apart from living in decadence. It is these cliques that has raped Africa and plunder her wealth. It is this clique that lives in grand opulence and a lavish lifestyle while the majority of Africans live in abject poverty. For the quality of life to be uplifted in Africa, the ruling clique should be eradicated and tossed into oblivion as the French did during the French Revolution.

Neither debt relief nor increased foreign aid is the solution; rather sanctions against the ruling African cliques are the key to fighting poverty in Africa. The problem is that the ruling African cliques spend their ill-gotten wealth in the foreign countries in educating their children, shopping-sprees for their wives and daughters, and hording the rest in foreign bank accounts. In order to address the poverty and bad governance in Africa, the international community should sanction the African ruling elites, deny them legitimacy, freeze and seize their foreign bank accounts and assets, and return those stolen wealth back to their rightful owners - the poor African people. Until such time, debt relief and increased foreign aid will just be another band-aid solution to Africa’s woes that will remain chronic and perennial.

Wudu Lado is a Sudanese residing in Ottawa, Canada.