Africa (Debt Crisis) (Hansard, 29 January 1987)

§ 2. Mr. Janner
asked the Chancellor of the Exchequer what action has been taken to combat the debt crisis in Africa.

§ The Financial Secretary to the Treasury (Mr. Norman Lamont)
The United Kingdom has helped directly to relieve the debt burden of African countries by a combination of rescheduling and converting loans to poor countries into grants. Our bilaterial aid to the poorest countries is now all in grant form and so does not contribute to their debt. United Kingdom bilaterial aid to Sub-Saharan Africa amounted to £285 million in 1985.

§ Mr. Janner
Is Oxfam in Leicester right to say that in many of these countries in Africa, especially those in Sub-Saharan Africa, the amount paid each year to service debts—the amount of interest—actually exceeds the amount of aid that they receive, so that the debts increase each year? While I welcome efforts that this and every Government make to assist, does the Minister recognise that, in the light of the mass starvation and misery in those countries, the efforts are totally inadequate at present?

§ Mr. Lamont
I welcome the opportunity to reply to that question, because the point that Oxfam has made is not correct. The total aid flows to the 29 poorest countries in Africa are twice the level of debt service payments in 1984. Oxfam's point is therefore not correct.

§ Sir John Farr
Does my right hon. Friend recognise that such a question from a Labour Member of Parliament shows that even the Opposition recognise the strength of our international and national financial stature at the moment, which enables us to contemplate giving financial assistance to the whole of Africa? Can my right hon. Friend confirm that the Labour Government could not succeed in running the national economy or balancing the books at home?

§ Mr. Lamont
My hon. Friend is right. Because of our financial strength we have been able, through retrospective terms agreements, to convert £240 million of old aid loans to countries, including Ethiopia, into grants. That is what UNCTAD had urged us to do. Britain is the second among OECD countries in converting loans into grants.

§ Mr. Nellist
Is the right hon. Gentleman aware that if I can find out the latest figures on debt, so can he? Is he further aware that in 1985—not 1984—the total aid given to African countries by charities and Western Governments was $3.5 billion and that in that year the 29 poorest countries repaid exactly twice that sum in debt service charges? Given that in those countries one child dies each second from malnutrition and hunger, is not the real solution not just sympathy and charity, but cancellation of the leaching of the banking and commodities system by the cancellation of debts to those countries?

§ Mr. Lamont
The figures that I gave are correct, and I stand by them. I do not believe that the figures for 1985 will show a different picture. I do not have the figures for 1985.

§ Mr. Nellist
I do.

§ Mr. Lamont
The figures that have been quoted by Oxfam are not correct. The Government have taken substantial measures to help the poorest countries of Africa. It is also a fact that 80 per cent. of our bilateral aid goes to the poorest countries, whereas the OECD average is 60 per cent. That shows that our aid has been concentrated where it ought to be—on countries that face a very serious problem.