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Civil Society and Expanded Dialogue Unit

G8 and Africa | Civil Society | Climate Change | Expanded Dialogue

See also G8 Online 2005

Interview with
Charles Mutasa
Research and Policy Analyst, AFRODAD

30 June 2005

The African Forum on Debt and Development (AFRODAD) is a civil society organization that campaigns to secure positive policy changes redress Africa’s debt and development crisis with the aim of achieving equitable and sustainable development for the continent.

G8RG: Your organization, AFRODAD, cautioned in a March 2005 policy statement that there is a "danger that the proposal of using bilateral contributions could divert resources from official development assistance (ODA) to debt cancellation, when what is needed in debt cancellation is to complement rather than substitute aid".  Now that the debt cancellation has been announced, is it clear that the debt relief initiative will indeed divert aid funds towards debt relief?

Charles Mutasa: What is needed is an effective delivery of the financial resources needed to meet development aims and objectives. Debt cancellation and increased aid provide necessary and complementary financial flows. In fact, both 100% debt cancellation and a doubling of aid will be needed if the Millennium Development Goals are to be met, especially in sub-Saharan Africa.

It is clear that debt relief initiative as announced by the G8 Finance ministers  will divert aid funds towards debt relief. The 18 countries announced will receive a dollar for dollar reduction in IDA flows equivalent to the amount cancelled. They will then receive new money on the basis of WB/IMF policy performance conditionalities under and for poor performers will result in no net gain from the debt cancellation.

We therefore believe that writing off multilateral debt should be additional to meeting the UN target that aid levels should be at least 0.7% of GDP of donor countries. In general, debt cancellation is a highly effective means to deliver new resources because it can be delivered early, and must be purely additional to agreed targets for increasing aid as a proportion of national income.

G8RG: What do you make of the timing of the recent debt relief announcement by the G7 Finance Ministers? Why didn't the G8 wait until Gleneagles? And what forces do you believe contributed to this concession - which many in the mainstream media are hailing as a historic breakthrough for debt cancellation initiatives?

Charles Mutasa: Growing demands/pressure from debt campaigners for a solution on debt

UK chairman of G-8 in 2005, commitment to 100% debt cancellation

Agreement to cancel a significant portion of Iraq's debt, shows that it takes only political will for the creditors to cancel the debts than anything else. Debt campaigners have been quick to seize on Iraq's example to press for similar treatment to other debt stressed countries.

Growing demands from African leaders for a solution on debt

Failure of HIPC Initiative to led countries to sustainable debt levels, WB/IMF studies proves this finding.

The need to make available resources to meet the MDGs. 

G8RG: You have been cited recently in a 14 June 2005 EURODAD Paper, Devilish Details: The Implications of the G7 Debt Deal as stating that the G7 Finance Ministers' debt relief announcement “does not address the real global power imbalances.  We reiterate our position that the debt crisis needs a lasting solution in which all stakeholders - debtors and creditors alike have a say” (p.7). Can you articulate for us where the G7 Finance Ministers have fallen short in this regard?

Charles Mutasa: Africa needs a full, unconditional debt write-off. Africa's US$350 billion debt stock, an annual debt service of US$15 billion, is the highest of any developing region in the world and a major stumbling block to its development. Debt is being used by the creditors as a tool for domination and exploitation and canceling would remove this weapon. The G7 Debt Deal to be implemented through the discredited HIPC Initiative, which was undemocratically crafted by the creditors without the involvement of the debtor countries, and imposed on them does not offer any hope for a lasting solutions coming from the creditors. Africa needs to challenge these debt before these rich nations. Most debts are illegitimate, odious, debt related to stolen wealth, and colonial debts. We believe a lasting solution should be through a fair and transparent arbitration mechanism under the United Nations. 

G8RG: What do you believe will be the effect of the G7 debt cancellation on the broader initiative to place Africa on a path to sustainable growth and development?

Charles Mutasa: Placing Africa on a path to sustainable growth and development requires a holistic approach and not piecemeal, undemocratic, selective and imposed measures. Whilst this is very encouraging, in some ways these proposals are nothing but an extension of the discredited HIPC initiative and suffer from some of the same limitations such as limited country lists and the lack of a comprehensive debt sustainability framework that can be applied across countries and various types of debts. The success depends not only on the timing and amount of the debt relief, but also on a country’s efforts to put in place sound policies to use resources effectively, strengthening productivity and growth, and invest in social sectors, thereby reducing poverty.


The G8 Research Group would like to thank all the organizations and individuals
who participated in interviews.
The views expressed herein do not reflect the views of the G8 Research Group.

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