Panafrican News Agency (PANA)
27 September 1996

Debt Crisis Could Cost Lives of 21 Million Children

KAMPALA, Uganda (PANA)- The debt crisis in poor countries of Africa could cost the lives of 21 million children by the end of the decade, a pressure group warned Friday.

Uganda Debt Network, a pressure group of international and local non-governmental organizations, issued the warning at a press briefing in Kampala ahead of the IMF-World Bank finance ministers annual meeting which opens in Washington next week.

The four-day meeting in Washington will discuss proposals for resolving the debt crisis in poor countries.

"The meeting is an important opportunity to reach an agreement on a solution for severely indebted African countries. Effective multilateral debt relief would offer new hope for improved human development in Uganda" Vicky Luyima of the Oxfam said.

Uganda's total debt stock is estimated at 3.2 million U.S. dollars while debt servicing due for this financial year is 164 million dollars.

"Finance ministers from the industrial world have the power to help end the unnecessary child deaths, sickness and disease which cast a shadow over Uganda, and to provide new hope and opportunity to some of the world's poorest people, " said Kevin Waikins, Oxfam International, in a report.

"On the table is a workable solution to the debt crisis. The human benefits are huge and the costs are minimal. Leadership is about taking decisions - finance ministers won't find an easier one than this. If they continue to prevaricate they know who will have to pay the costs."

The Oxfam report welcomes recent improvements in the IMF/World Bank debt proposal including recognition of the need for the IMF to contribute to debt reduction through grants rather than loans, and moves towards a more flexible time-frame allowing for earlier debt relief.

However, it notes, differences between creditors continue to block an agreement. The industrial countries remain divided over the terms of the IMF's contribution to the initiative, and over the distribution of costs between creditors.

Debt relief would generate very high returns in human welfare improvements for a small investment, the report says.

"The financial resources needed to resolve the debt problems of the poorest countries pale into insignificance against the resources available to creditors. The only resource which has been lacking is the political will to stop talking and start acting," says the report.

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