US bill calls for total cancellation of African debt

A bill calling for the cancellation of all bilateral debt owed by African countries to the United States is to be proposed by Jesse Jackson Jr, a member of the House of Representatives for Illinois.

The bill would also instruct U.S. representatives to the IMF and the World Bank to advocate full debt cancellation for African countries and to oppose any agreement that requires any African government to devote more than 5% of export earnings to serving foreign debt.

The bill also provides for the purchase by the U.S. government (at January 1, 1999 market value) of all debt owed by African nations to private U.S. lenders and the debt's subsequent cancellation.

In all cases, African governments benefitting from debt cancellation will be encouraged to devote at least 20% of their national budgets to basic services, with civil society input into allocation decisions.

Speaking on 2 February Jackson said he planned to introduce “The HOPE for Africa Act of 1999” within a few days. This is a broader trade bill and has been put together by what Jackson called a “broad-based group of African and U.S. citizens groups -- church, labour, development, and anti-hunger NGOs” – as an alternative to US government's proposed “African Growth and Opportunity Act”.

“First and foremost, 'The HOPE for Africa Act' seeks to eliminate the greatest obstacle to the realization of Africa's enormous economic potential: the region's $230 billion in external debt,” Jackson said.

“Any policy for development in Africa that is intended to benefit Africa must be premised on unconditional debt cancellation. The history of U.S. cancellation of debt includes reversal of the U.S. demand that Germany pay 10% of its post-World War II export earnings to recover debts owed prior to the war. Germany successfully negotiated for a rate which resulted in annual payments of less than 3.5% of export earnings. Currently Mozambique, one of the world's poorest countries, pays over 20% of export earnings in debt service. To require African nations to compete in the global economy burdened with this debt is like throwing a person into the deep end of a pool with a ton of lead weights chained to their ankles,” Jackson said.

“African business development is not possible with 20% of all African export earnings now going into debt payment. This is debt that has been repaid many times over, but with compound interest and new loans to pay the interest of old loans, this debt will never be 'officially' satisfied. This debt must be wiped clean, a demand of the worldwide religious Jubilee 2000 campaign,” Jackson added.

The bill also says that “IMF and World Bank structural adjustment programs have imposed enormous preventable suffering on African people” and thus debt cancellation should not be conditional on such programmes.

A final version of the Bill is not yet available, but the draft provisions relating to debt have been released and are given here.

Three reports on Jesse Jackson Jr's website relate to the bill:

• "The HOPE For Africa Act" (Legislative Outline)
  2 February 1999 Speech on the Floor of the House
• "The HOPE For Africa Act" (Testimony, House Ways & Means Sub-Committee On Trade)
  3 February 1998 Speech on the Floor of the House
• "The HOPE For Africa Act Of 1999" (Press Conference Statement By Rep. Jackson)
  2 February 1999