CHRISTIAN AID is among a consortium of agencies who are calling on the Government to support programmes for debt relief and restructuring to reduce the “choke hold” that sovereign debt has on countries in the global south.
A study conducted by the consortium of charities and development organisations suggests that poorer nations with loans from private creditors face increasing difficulties.
The worldwide economic downturn is making debt-repayment more expensive, and this has a knock-on effect on the money that indebted countries have available for services such as health and education, the study says. Much of this debt is hidden from citizens and needs to be made more transparent, it argues.
The research, which will be published in full later this year, was carried out by Tax Justice Network-Africa, the Civil Society Legislative Advocacy Centre, and Instituto Centroamericano de Estudios Fiscales, in collaboration with Christian Aid.
The charity’s interim director of policy in Africa, Karimi Kinoti, said last Friday that “the diversion of limited public funds to pay back expensive private debt acts like a choke hold on too many national economies in the global south.
“Money should be going to where it’s most needed, like adapting farming to climate change and better health services.
“The UK Government has a moral obligation to act. Ministers should use their influence to compel private creditors to support debt relief and ensure debt is assessed on the contribution to sustainable development and not on a country’s ability to pay.”
The statement by Christian Aid was timed to coincide with the International Monetary Fund’s annual gathering of economic leaders. At the meetings, held in Washington last week, the Zambian finance minister, Situmbeko Musokotwane, was one of several leaders who called for more action on debt relief and restructuring.
At the Lambeth Conference in August, six Anglican Primates added their voices to a call to the UK Government to cancel sovereign debt owed by Zambia and other low-income countries (News, 2 August).
The Primate of Central Africa, the Most Revd Albert Chama, said that servicing the debt put such strain on public finances that cuts had to be made to public services. The debt meant that “ordinary Zambians lose out on health care, education, and development projects which would give them a fair chance to thrive and build futures.”