Sub-Saharan Africa

HC Deb 11 January 1988 vol 125 cc11-2

35. Mr. Brandon-Bravo

To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on initiatives arising from the World Bank meeting on 3 December to discuss help for the poorest and most heavily indebted countries in sub-Saharan Africa.

Mr. Chris Patten

The meting identified substantial aid resources available from Western donor countries for coordinated support for structural adjustment programmes in poor sub-Saharan African countries with debt problems. Her Majesty's Government stated that they expect to commit about £250 million of programme aid over the next three years to the target countries. Total pledges at the World Bank meeting amounted to $6.4 billion. In addition, the World Bank expects to commit $6.2 billion to the special programme of assistance from the eighth replenishment of the International Development Association.

Mr. Brandon-Bravo

My hon. Friend has set out a most welcome and substantial package. Will he tell us something more about the effect of long-term debt on such countries, and particularly what sums may have been written off? Although we cannot always protect people from their own folly, is there some way in which we can break the cycle of debt and trouble?

Mr. Patten

The best way of breaking the cycle to which my hon. Friend referred is to make progress in implementing the Chancellor's important debt initiative for the most debt-distressed African countries. That initiative has been widely welcomed and was endorsed at the Commonwealth Heads of Government meting and by Commonwealth Finance Ministers. Another way of breaking the cycle is for debt-distressed countries to pursue the sort of policy reforms that are already being sucessfully implemented by several African countries.

Mr. Spearing

Is it not equally important to ensure that such malevolent cycles do not recur? What sort of terms are being planned for the £6,000 million IDA replenishment that the Minister has mentioned? Is it not essential that the return on such capital lending should be within the resources of the country and, in particular, should not be prejudicial to the poorest people in the country, whom such loans are originally meant to benefit?

Mr. Patten

Of course, it is essential that the terms should be such as can be managed by the poorest countries. The terms that are offered by the IDA are extremely soft. I am sure that the hon. Gentleman will know about the increase in the IMF structural adjustment facility. He may also know that, a few weeks ago, the Chancellor of the Exchequer announced that we are intending to subsidise a lending equivalent of £750 million under the structural adjustment facility. That covers more than one sixth of the total new lending. It is not perhaps surprising that that was welcomed by the managing director of the IMF as a remarkable contribution.