The world's richest countries will assume the debt burden of 18 of the world's poorest countries—about $40bn (£22bn; €33bn)—after a final agreement reached in London last weekend by finance ministers meeting ahead of next month's summit of the G8 (the world's most industrialised countries) in Scotland.
The deal will include all debts owed by the qualifying countries to the World Bank, the African Development Bank, and the International Monetary Fund. Fourteen of the countries included in the deal are African—Benin, Burkina Faso, Ethiopia, Ghana, Madagascar, Mali, Mauritania, Mozambique, Niger, Rwanda, Senegal, Tanzania, Uganda, and Zambia. The four others are in Latin America—Bolivia, Guyana, Honduras, and Nicaragua.
These countries had already qualified for debt restructuring under the World Bank's Heavily Indebted Poor Countries Initiative. Nine more African countries are also likely to qualify for debt cancellation under these terms in the next 18 months, followed by 11 more in the next few years. The total debt cancelled for all 38 countries will amount to about $55bn.
A statement issued over the weekend by the G8 finance ministers also set a goal of “universal access for AIDS treatment by 2010 and development of vaccines, including for HIV and malaria.”
The cancelled payments will add up to about $1.5bn a year. The G8 members will themselves make up the shortfall to the lending institutions. Britain will give about $700m-900m to this end in the next decade, and the US will contribute approximately $1.5bn. New rules will be drawn up by the World Bank to ensure that future loans are not swallowed up by government corruption.
The announcement will be seen as a victory for Prime Minister Tony Blair, who was in Washington, DC, last week to push for a deal on African aid and debt. But he failed to secure an American commitment to match European governments' recent pledges to increase aid to 0.7% of gross national income by 2015.
Nevertheless, according to the UK's chancellor, Gordon Brown, the extra aid pledged by other countries is sufficient to meet the target, set by Mr Blair's Africa Commission, of immediately increasing aid to Africa by $25bn (BMJ 2005;330: 622, 19 Mar). In addition to the European Union boosting its overseas development aid, Canada and Japan have promised to double their aid to Africa by 2008.
