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Africa's External Debt Situation

  • Robert L. Curry
Extract

What, if anything, should be done about the rapidly mounting external debt of African and other Third-World countries? This question, prominent within the agenda of U.N.C.T.A.D. 5, is inseparable from the broader problem of what to do about the structure and performance of the global economy which, based on an international division of labour, puts numerous African countries in a situation where they experience acute and chronic deficits and unfavourable terms of trade. The accumulation of outstanding debt, and the concurrent obligation to meet growing service payments, is the result of that structure and process.

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page 15 note 1 World Bank, World Debt Tables, Vol. 1 (Washington), 09 1977, pp. 74–5.

page 15 note 2 Ibid. p. 75.

page 15 note 3 The grant element refers to the ‘softness’ of a loan in terms of interest rates less than market terms, maturity periods longer than market periods, and generous grace periods.

page 16 note 1 The Manila Declaration and the Program of Action of the Group of 77 is contained in U.N.C.T.A.D. document TD/195 (Geneva, 1976).

page 17 note 1 For a detailed discussion of the progress of the debt issue in international forums, see Agency for International Development, Development Issues (Washington, 1978), ch. VII.

page 18 note 1 Ibid. p. 70.

page 18 note 2 Ibid.

page 19 note 1 Congressional Record. The Humphrey Bill (Washington), 01 1978; and Christian Science Monitor (New York), 28 03 1978, p. 13.

page 19 note 2 The structure of subsequent legislation is essentially the same as section 208 (c) of the Humphrey Bill.

page 21 note 1 Sources: World Debt Tables, Vol. I, 1977, pp. 219–26, and World Bank, World Development Indicators (Washington, 1978), pp. 22–7. The 30 countries in Table 1 were selected on the basis of data availability, and the figures for 1977 will not be published until later during 1979.

page 23 note 1 World Bank, Social and Economic Indicators (Washington), 07 1978, Tables 11 and 13.

page 23 note 2 Ibid. Table 1. However, the indicators for Nigeria will change due to recent loans in the international capital markets, and to downward pressures on export earnings.

page 23 note 3 World Debt Tables, Vol. 1, 1977, pp. 7892.

page 24 note 1 See, for example, Curry, Robert L. Jr, ‘Liberia's External Debts and their Servicing’, in The Journal of Modern African Studies (Cambridge), X, 4, 12 1972, pp. 621–6.

page 25 note 1 Source: International Monetary Fund, Annual Report (Washington, 1978), ch. 1.

page 25 note 2 Source: World Debt Tables, Vol. I, 1977, passim.

page 26 note 1 This definition is generally used by various bilateral and multilateral donors of official development assistance.

page 26 note 2 Source: World Debt Tables, Vol. 1, 1977, p. 230.

page 26 note 3 See, for example, Cleveland, Harold van B. and Brittain, Wilt B., ‘Are the LDCs in Over Their Heads?’, in Foreign Affairs (New York), 55, 4, 07 1977, pp. 732–50.

page 26 note 4 See, for example, U.S. Congress: Senate Sub-Committee on Foreign Economic Policy, International Debt, the Banks, and U.S. Foreign Policy (Washington), 08 1977, pp. 115.

page 27 note 1 Ibid. p. 11.

page 27 note 2 Source: Ibid.

page 27 note 3 There have been more than 40 loan Consortium and creditor club agreements involving Third-World countries since 1956, including Zaïre (2), Sierra Leone (1), and Ghana (4). It should be noted that all agreements in Africa were via creditor clubs. See Development Issues, pp. 64–5.

page 28 note 1 In this sense, aid and debt have been put into broader perspective: see Achieng, Ongonga, ‘The Mask of “Aid to Poor Countries”’, in The Nationalist (Dar es Salaam), 14 07 1970, p. 4;Durosola, Segun, Dollar Pressure in Africa (Lagos, n.d.), mimeographed;Hayter, Teresa, Aid as Imperialism (London, 1970); and Rothchild, Donald and Curry, Robert L. Jr, Scarcity, Choice, and Public Policy in Middle Africa (Berkeley, 1978), ch. 7.

* Professor of Economics, California State University, Sacramento.

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The Journal of Modern African Studies
  • ISSN: 0022-278X
  • EISSN: 1469-7777
  • URL: /core/journals/journal-of-modern-african-studies
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