Eight ways to ease Africa's debt burden
Washington
1. Postpone due dates on loans. (Already being done by many lending nations; but about a dozen African nations are having trouble paying postponed loans, too.) 2. Increase grants and easy-term loans. (Last year Western nations increased such aid by about $800 million to poor African nations promising reforms. Pledges for low-interest World Bank loans are $12 billion over the next three years, an increase of $3 billion over the last three years. About $6 billion of the $12 billion is slated for Africa. Approval of US share is pending before Congress. World Bank officials are discussing additional special-case help for the hardest-hit African debtors.)
3. Get export credit agencies, such as the US Export-Import Bank, to break tradition and give easier terms on money due. (Pay later; pay less.)
4. Better coordination between the World Bank and International Monetary Fund on financing Africa's debt. (This is increasing, World Bank and US Treasury officials say.)
5. Additional Western funding through various market investment instruments to be paid by ``balloon'' financing sudden payment of most of the balance in 20 years. (Sought by the African Development Bank.)
6. Another IMF issuance of its in-house ``currency'' known as Special Drawing Rights. This would be a ``gift'' to all member nations with which foreign exchange may be purchased from another IMF member. Distribution could be on basis of need. (Future use of SDRs worldwide is being debated within IMF. Some US congressional support; US Treasury is opposed.)
7. Moratorium on African debt payments for a while. (US foreign aid bill for Africa now before Congress suggests five-year moratorium on money owed to US. US Treasury is opposed.)
8. Other proposals: African nations stop payments or make payments in local currencies, after international agreement on use of the savings for development; IMF sale of some of its gold to get additional loan funds for Africa (Some support in academic circles and at State Department; lacks support of US Treasury.)