African Debt—Is Wiping the Slate Clean a Good Idea?

Britain's finance minister, Gordon Brown, is proposing that the G7 countries cancel Africa's debts to Western banks. Will this move give Africa the economic boost it needs to finally get off the ground?

by Melvin Rhodes

It sounds reasonable enough, but will it work? Gordon Brown, the British chancellor of the Exchequer (finance minister), is proposing that the G7 countries (the seven richest countries of the world) cancel the debts of the poorest countries of Africa.

A few months ago I was in England sitting with some friends in a charming English country garden. The subject of Africa came up. Then it was how best to help with the limited aid available.

Some Western nations are quite generous with their aid, but recipient nations in Africa were critical of what the aid was to be used for. So one individual present echoed the solution repeated by many commentators that the African leaders themselves—the people on the ground—were best placed to make the decision on how the money should be spent. Again, it sounds reasonable enough, but will it work?

Richard Dowden has had decades of experience working in Africa, including eight years as Africa editor for The Independent (United Kingdom) and six years as Africa editor of The Economist. He is now president of the British Royal African Society. Mr. Dowden was interviewed on the BBC's World News program, shown nightly on many PBS stations across the United States.

His considered opinion was that canceling the debts of the African nations would not make any difference; that the real problems in Africa lay elsewhere.

Something certainly has to be done about Africa. African nations have now been independent for almost 50 years, but Africa remains the only continent to have gone backwards economically during that same period of time. Many people in Africa struggle on less than one dollar a day. Most don't even earn that—they are subsistence farmers eking out a meager existence on small pieces of land.

At independence, African nations had no debts. Many had considerable assets left by their former European rulers, money that was often squandered in the first flush of independence, wasted on grandiose prestigious projects that were not sustainable.

As the money ran out, leaders often turned to Western banks, which were only too willing to lend them money in the naive belief that governments were bound to pay them back.

Much of this borrowed money did go back into Western banks—usually Swiss bank accounts held by the African presidents who borrowed the money. While the bank accounts of the presidents grew fatter, the people got thinner as their standard of living progressively declined. That particular generation of African leaders has now died out, but the debts they accumulated in the names of their respective countries remain.

Should they be canceled?

Fears have been expressed in some of the debtor countries that, if the debts are canceled, banks will not trust them with any further loans. However, others are saying that the cancellation of the present debts will only lead to new and greater debt being accumulated.

What is often overlooked is the corruption that lies behind this mountain of debt, something with which Richard Dowden would be all too familiar, having spent many years covering Africa for the media. Those of us who have lived in Africa have experienced this, almost on a daily basis.

It is this corruption, at the highest levels of African society, that is one of the root causes of Africa's problems. It is the primary reason the cancellation of African debt won't make any difference to the welfare of the African people, unless it is accompanied by serious changes in African culture.

Endemic corruption

It is difficult for people in Western nations to appreciate just how pervasive corruption is in some parts of the world. The following are fairly typical examples.

Every year we hold a summer camp for teens in the West African nation of Ghana. About a dozen teens travel from Nigeria, via Benin and Togo, two small French-speaking countries, to join us at the camp. The official cost of the road journey is $120 per teen. With the additional costs of all the extortion practiced en route, the actual cost is slightly more than double that, $250 per teen. Nigeria, Togo and Benin remain among the most corrupt of all African nations.

This is nothing compared to the Democratic Republic of the Congo, where it is estimated the average citizen loses 80 percent of his income to corrupt officials!

Ghana has made considerable progress in overcoming endemic corruption, though corruption still exists. Twenty-five years ago, corrupt administrations had progressively reduced Ghana from being the richest African colony in colonial times to what would today be called a "failed state." At that particular time, virtually nothing could be accomplished in the country without a "dash," a euphemistic name for a bribe, which also added a twist of humor to what was a national tragedy.

Going to the bank did not enable you to withdraw your own funds from the bank, at least not until you had given the teller some of the money for himself. Even a visit to the post office required a "dash" before you could buy the postage stamps necessary to write home to ask for more money!

Permits were required for just about everything, and when you went for a permit, a dash was not only expected, but absolutely required to facilitate the permit you needed. When my wife came down with malaria and ended up in the local hospital, it was made clear that nothing could be done until the doctor received a bottle of whisky—we only hoped he would treat her first before consuming the contents!

When I went for my Ghanaian driving license, I was told I had a choice. I could either pay for a driving test and fail, or give a dash and pass (without the test). The standard of driving in the country at the time suggested that most had opted for the second option! In fact, to this day, many drivers are illiterate, which means they cannot have taken the test, though they must have a license to drive!

Following a bad accident, in which our Land Rover was hit by a bus driven by a drunken driver, the judge canceled the subsequent court case, having been bribed by the relatives of the bus driver.

At the time of all this corruption, Ghana was under a military government. Many hoped that corruption would go away with an elected government. But this was naive.

Nigeria at the present time has a civilian government. However, a recent report in the Financial Times (London) showed that corruption is, if anything, worse than under the military. Indeed, many African nations are in a never-ending cycle in which the military is needed to overthrow corrupt elected civilian governments; in turn, the military eventually comes under pressure to hand over to civilians because they are so incompetent!

Meanwhile, the leaders of both civilian and military governments accumulate vast amounts of money in overseas bank accounts, much of it "borrowed" from Western banks on behalf of their countries. Even when they are overthrown, the money often cannot be retrieved. Judgment and justice are two qualities that suffer greatly whenever there is corruption.

In trying to decide how best to deal with African debt, Western countries are in a quandary. There is little Western countries can do to ensure that African leaders will not siphon off money loaned to them in the future by Western banks. A proposal by African leaders that some sort of "peer review" be set up is unlikely to succeed as corruption is a problem throughout the continent. Canceling the debt already accumulated is one issue—further loans in the future would only enable even more corruption to take place at the expense of the African people.

How can this be stopped?

What is amazing is that this corruption thrives in countries where the vast majority of people claim to be Christian. Christians are commanded "to walk just as He [Jesus Christ] walked" (1 John 2:6). Jesus Christ was perfect, without sin (Hebrews 4:15). "Sin is the transgression of the law" (1 John 3:4, King James Version).

Among the laws that Jesus did not transgress are the following: "You shall not pervert the judgment of your poor in his dispute... And you shall take no bribe, for a bribe blinds the discerning and perverts the words of the righteous" (Exodus 23:6,8).

In the book of Deuteronomy, we read: "You shall not pervert justice; you shall not show partiality, nor take a bribe, for a bribe blinds the eyes of the wise and twists the words of the righteous" (Deuteronomy 16:19). Proverbs 17:23 adds, "A wicked man accepts a bribe behind the back to pervert the ways of justice."

These verses deal with the moral issues raised by corruption. The proposal to the G7 countries is an attempt to deal with the economic consequences. But without changes at every level of African society, canceling the debts of African nations will accomplish nothing.

Thankfully, a time is coming when Africa will have righteous government that does not permit bribery and corruption. In a prophecy about the coming Kingdom of God, Jesus Christ, our soon coming King, in imposing His government upon the earth, is going to "order it and establish it with judgment and justice" (Isaiah 9:7). WNP

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