AFRICA’S UNFAIR DEBT TRAP
By Paliani Gomani Chinguwo (from Malawi)
[Initially published in Economics Society Newsletter, a publication of the University of Malawi, and in Nation, a daily newspaper in Malawi, both in 2002]
As far as African History is concerned, probably the greatest tragedies of all time, which also satisfy the requirements to be termed a "serious crimes against humanity", were the advents of the slave trade (Trans-Atlantic & East African) and colonialism.
Caucasians brutally uprooted millions of Africans, packed them in ships like sardines, and took them to America and the Caribbean islands where their labour was inhumanly exploited. Africa was directly subjected to over 400 years of trans-Atlantic and Eastern African slavery when the slave trade spread to displace millions from their kingdoms and empires. A greater number yet, perished through slave hunting raids.
After the abolition of slavery in the west, In 1884-85 European states` delegates met in Berlin (Germany) to resolve their so-called ‘Scramble for Africa’. It was during this conference that the African continent was fragmented for the benefit of European countries. These fragments later developed into politically independent states. Renowned historians like Mark Hyman, Walter Rodney and others, have cogently put across that the colonization of Africa by the Europeans, marked the beginning of another kind of slavery in disguise, since, for about the next 90 years or so, Africa was subjected to colonial torture, plunder and exploitation in form of natural resources, forced labour, terrorism, expropriation, unfair taxation, genocide, brainwashing etc.
It is outrageous that after slavery and colonialism, Africa happens to be heavily indebted to the western nations which at one time colonized it. Cases of mismanagement and corrupt practices as a result of mediocre leadership in most governments in post-independent Africa have caused African indebtedness which accelerated over a mere 45 years. Great proportions of government revenues including substantial loans borrowed from international lending institutions to fund various developmental projects in Africa have ended up being ‘deposited’ in our government officials` personal bank accounts in the west.
Sani Abacha and Mobutu Sese Seko, former Presidents of Nigeria and Zaire respectively, are good examples of such culprits in this regard. Their personal bank accounts in the foreign banks are fat with huge sums of money realized through misappropriation of public funds and diverted loans while they were in power. Though it is widely accepted even by the so called "international community," that a great proportion of these hundreds of millions of US dollars in our leaders accounts, were obtained at the expense of poor Africans, all efforts to redeem these huge sums from those foreign banks to finance various developmental projects in Africa have so far proved futile.
Through IMF/World Bank policies that have been imposed on developing countries for the past decades, Africa has greatly been constrained to produce and export raw materials at very low prices and import-manufactured products at unreasonably higher prices. Partly, this has also kept Africa mal-developed. Chinweizu states "By holding us in their economic cage and stimulating our appetites while ruthlessly reducing our purchasing power, the western countries sharpen the competition for crumbs within and between our nations and states. We are so engrossed in these inter personal, inter ethnic and inter-locality competitions ?" (1996) "Black Redemption".
The World Against Africa: Africa Can’t Benefit from World Economic History
At the beginning of the year 1998, the external debt of sub-Saharan Africa was approximated to be $328.9 billion. To settle this heavy debt, African countries would have to pay not less than 60% or $85.4 billion of the 142.3 billion in revenues generated from their exports. Shockingly, African countries have managed to pay back at least 17% of their export earnings to the donors and international lending institutions yet, a grand total of $60.9 billion remains unpaid. To some extent it might be true that the failure to meet basic needs due to the debt burden in no small measure, contributes to the level of tension and conflict on the African continent. (Annan K.1998: Section 93).
Historically, nations with dept burdens exceeding that which currently exists with Africa have managed to negate this, but why has the world refused to see Africa in the same economic light as it has seen even Developed countries?