African censure for World Bank over drive to reduce poverty
By James Lamont in Johannesburg, 
published: October 22 2002 5:00

African finance ministers yesterday criticised the World Bank's debt relief programme for failing to keep step with goals to reduce poverty in some of the poorest African countries.

At the end of a three-day UN-hosted meeting, the finance ministers called for the Heavily Indebted Poor Countries (HIPC) initiative to be brought in line with the UN's Millennium Development Goals, which seek to halve poverty levels by 2015. African governments want the World Bank and donor countries to move beyond HIPC to offer greater debt relief and to extend relief to non-HIPC countries.

"It is clear that the HIPC initiative is not working well enough. Only six African countries have reached their completion points and for some of them the debt remains unsustainable," the ministers said.

"What is needed is to move faster to increase relief, to align it with the pursuit of Millennium Development Goals and to free up resources for development."

The World Bank considers the HIPC initiative a package of comprehensive measures to allow developing countries to exit from high unsustainable debt levels. The initiative, first agreed in 1996, was reviewed three years ago and has been heavily championed by western governments and Bono, the Irish rock musician. Under the programme, debt relief is awarded in return for the implementation of poverty reduction and economic reforms by governments.

The current value of public debt in the 33 countries that qualify for HIPC - such as Mozambique and Uganda - is about $90bn (€92.6bn, £58bn). HIPC and traditional debt relief measures are expected to reduce it by half.

The finance ministers had met in Johannesburg under the umbrella of the UN Economic Commission for Africa to seek ways of implementing the New Partnership for Africa's Development, a plan to promote good governance and greater aid and investment flows. Within the Nepad framework, they want deeper and faster measures of debt relief.

At the heart of their debate is a voluntary mechanism of review by African countries of each other's governance and economic policies. Those countries that submit to the review are expected to receive benefits from donor countries.

So far only Ghana and Tanzania have stepped forward for review. One of the greatest incentives for doing so is the promise of debt relief.

"Ministers have been saying that they have talked about Nepad at more than seven meetings and they now want to move to some action. Implementation is the issue now," said Trevor Manuel, South Africa's finance minister.