ABSTRACT
Africa is centre stage in the struggle for relief from external debt burden. While it has only 5 per cent of the developing country’s income, it carries about two thirds of the debt. According to the United Nations Conference on Trade and Development, between 1970 and 2002, Africa received $540 billion in loans. In that same period, it paid back $550 billion in principal and interest. In 2002, Africa had $295 billion in debt. It is fair to suggest that the continent’s debt crisis has worsened during the period of resurgent neoliberalism. From 1980 to 2000, Africa’s total debt rose from $60 billion to $206 billion, and the ratio of debt to GDP rose from 23 per cent to 66 per cent. In short, Africa now repays more than it receives. Such high and unsustainable debt burden has meant that the average African country spends three times more of its scarce resources on debt servicing to developed countries and multilateral lending institutions than it does on providing basic social services. Debt servicing thus diverts much needed financial resources away from investments in education, health care and housing. Indeed, the greatest barrier to economic recovery and renewal is the continent’s onerous debt burden which acts as a constraint on the ability of African countries to pursue sustainable and equitable growth, sustainable human development and poverty reduction.
