Africa’s Debt and Structural Adjustment

Programs

Where does the debt come from? Why is it increasing over time?

• Trade imbalance: the goods Africa produces/exports not valued as much on world market as goods Africa imports (why? Mainly raw, unprocessed materials; this has changed in the last decade with the increase in the use of mineral wealth, driven by China’s fast-growing economy).

• Most aid from Western countries in the form of loans, not grants (Jevanna)

• Creditors were the World Bank, and the International Monetary Fund (IMF)

• Corrupt leaders who squandered the money on their personal bank accounts

• Used for development: Example of Volta River Dam (in Ghana)

Structural Adjustment Programs (SAP)

Regulations set by IMF on African governments to increase their debt payments:

1) Reduce government spending (mainly affected health, education, social welfare)

2) Invest resources in export products (timber, coffee, copper, etc. privatizing gov. businesses)

The Lunda-Ndembu, • p. 311: SAP in Zambia and President Chiluba• p. 315: SAP = Satana Ali Pano (Satan is here)

HIPC = Highly Indebted Poor Countries

Where is the money going?