The US top Africa diplomat said this is a cycle they have witnessed before and they hope for it not to reoccur.
United States cautions Africa not to expect debt relief
The U.S. Assistant Secretary of State for Africa for African Affairs Tibor Nagy has warned African countries accruing debt they won’t be able to pay back not to expect to be bailed out by Western-sponsored debt relief.
In 1996 the International Monetary Fund (IMF) and World Bank started the Heavily Indebted Poor Countries (HIPC) initiative. This was to help the world’s poorest receive relief on billions of dollars worth of unsustainable debt.
However, a report released by IMF a year ago, showed that there could be another debt crisis in Africa, with around 40 percent of low-income countries in the region now in debt distress or at high risk of it.
Tibor Nagy on the HIPC programmme said “We went through, just in the last 20 years, this big debt forgiveness for a lot of African countries.”
“Now all of a sudden are we going to go through another cycle of that? … I certainly would not be sympathetic, and I don’t think my administration would be sympathetic to that kind of situation,” he told reporters in Pretoria, South Africa.
The Trump administration has in recent times criticised China for giving loans to poor countries that are already indebted.
The US has warned that these poor nations risk losing control of strategic assets if they can’t repay the Chinese loans which are mainly through infrastructure development.
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