Africa's endless desert of need

If past practices hold, the debt relief windfall for 14 sub-Saharan nations could have little impact on the areas of greatest distress.

June 19, 2005|By Michael Hill | Michael Hill,SUN STAFF

It is a tale familiar to anyone who has lived in Africa. Someone is gainfully employed, bright, eager, ambitious, apparently ready to climb up capitalism's ladder.

But it never happens. This poster child for free enterprise remains stuck on the bottom rung. Behind the facade of success is a deep abyss of need. Will a similar fate sap the power of a $40 billion African debt relief program just agreed to by the G-8 nations? The plan will free up about $1.5 billion a year that 14 sub-Saharan countries could use to attack widespread social and economic problems.

"This is more than a superficial announcement," says Joseph Siegle, an associate director at Center for Institutional Reform and the Informal Sector (IRIS) at the University of Maryland. "A lot of effort and political energy went into it, especially from Britain. It removes one important obstacle to development and poverty alleviation in Africa."

FOR THE RECORD - In an article in last Sunday's Perspective section about poverty in Africa, a political scientist was incorrectly quoted about the location of demonstrations against rising food prices that resulted in the detention of 17 political leaders. The demonstrations took place in Niger.
The Sun regrets the errors.

It might be just the opening act. President Bush met with the heads of five African nations last week. The full G-8 summit in Edinburgh next month is expected to focus on Africa's needs, again pushed by Britain and spurred by hundreds of thousands of demonstrators demanding help for the continent.

Making the most of aid from the world's most developed nations is critically important for the 700 million residents of sub-Saharan Africa, which trails the world in virtually every standard of economic and social well-being.

But will the aid have real impact? Even the best-intentioned African governments and leaders too often seem analogous to this hard-working person who can't get off the bottom rung of the economic ladder.

The problem, it turns out, is that this person is the only one employed in an extended family of 20, 30, maybe 40 people. Strong family ties are reinforced by a tradition of responsibility.

The paycheck that is enough to save toward a house, a car and more education is instead paying school costs for a dozen children. It is committed to the expensive funeral of an elderly relative. It is needed by other kin simply to get by, day to day.

Like so many other Third World paychecks, instead of accumulating like water behind a dam - building up a concentration of capital needed to fuel economic growth - it disappears almost without a trace into the thirsty sands of a desert of need. Instead of creating wealth, it just recycles poverty.

Will that be the fate of this debt relief windfall?

For years, debt relief has been held out as a powerful elixir for Africa's ills. The money paid to service these debts goes from the poorest countries in the world to extraordinarily rich financial institutions. The money buys bankers' Mercedes Benzes instead of vaccine for children.

Industrialized countries send aid to African nations, which, in turn, send the money back to banks in those industrialized states. No wonder aid seemed to have little impact. And no wonder Africa-conscious celebrities such as Bono and Bob Geldolf have hammered on debt relief.

"By my calculations, using World Bank data, on average these countries were spending about 3.5 percent of the [gross domestic product] on debt service alone," Siegle says. "That is a pretty significant drain on resources that were very limited to begin with. It definitely puts a constraint on what they can do in terms of investing in health, agricultural and educational sectors of their societies."

The countries are paying back loans, so the argument goes, that should never have been made, money given to previous repressive "Big Man" regimes, often as a payout for loyalty during the Cold War; money that has long been squandered.

"This was a public debt, but it just created private wealth," says Siba N. Grovogui, a professor of political science at the Johns Hopkins University. "The idea that they are in debt does not make sense to a lot of people in Africa because they never saw the money they are supposed to have borrowed, yet they have to take the painful medicine because of it, things like devaluing the currency."

The legacy of these loans is to help sink the efforts of today's genuine reformers, burdening them with payments that crippled their efforts to help their countries. Debt relief frees them of that burden. It's a bit like someone who had, in an irresponsible youth, run up ruinous credit card debts declaring bankruptcy and starting over.

The question is, can these countries change their ways? The 14 countries - Benin, Burkina Faso, Ethiopia, Ghana, Madagascar, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia - were chosen because of their poverty and because they have made reforms.

Left off the list were clearly needy, but dysfunctional, nations such as Congo, Sudan and Angola, as well as the continent's most populous country, Nigeria, where even reformminded governments have failed to make a dent in corruption in a country where it has been raised to an art form.

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