African Debt

Introduction: According to an essay written by Ann-Louise Colgan titled Africa's Debt published online on the African Action website, in the 1960s and 1970s, African countries became indebted to international lenders as they accepted loans for political and economic stabilization in the post-independence era. Many of these loans were made to corrupt regimes, and much of the money went into the hands of repressive governments or de facto dictatorships. Sub-Saharan Africa's debt crisis worsened during the 1980s, as the ratios of foreign debt to the gross national product rose from 51 percent in 1982 to 100 percent by 1992. This foreign debt continued to grow during the 1990s. The 48 countries in what is commonly referred to as sub-Saharan Africa pay approximately $13.5 billion every year to repay debts to foreign creditors. These repayments divert money directly from basic human needs such as health care and education, and fundamentally undermine African governments' efforts to combat the AIDS pandemic as well as efforts to promote sustainable economic development (Golgan).

Beginning in 1989, a range of measures were enacted to reschedule and restructure these debts and the debt repayment schedule. According to an article by David Ransom published in New Internationalist, in 1996 the IMF and World Bank conceded that some of the debts owed by the poorest and most indebted countries might have to be written off and formed the Heavily Indebted Poor Country (HIPC) Initiative.

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