§ Mrs. Bridget PrenticeTo ask the Chancellor of the Exchequer what plans the British Government have to assist Africa in reducing its debt burden; and if he will make it his policy to secure international agreement for Africa's debt burden being written off.
§ Mr. NelsonAt the Commonwealth Finance Ministers' meeting in Trinidad and Tobago in September 1990, my right hon. Friend the Prime Minister, then Chancellor, proposed a reduction in the stock of eligible debt of two thirds. In December 1991, the Paris Club of creditor countries agreed to allow creditors to provide the equivalent of 50 per cent. cancellation of eligible debts consolidated under each agreement. Seventeen countries have so far benefited from Trinidad terms, including 13 of the poorest countries in sub-Saharan Africa. Under these agreements over $3 billion of sub-Saharan African debt has been rescheduled by the Paris Club, cancelling over $1 billion during the lifetime of the agreements. The Trinidad terms also include an undertaking by creditors to consider a reduction in the stock of eligible debt after a period of proven financial and economic responsibility of three to four years.
The Government are, however, aware that for some of the poorest and most severely indebted countries Trinidad terms as currently applied will not be enough. For this reason we are pursuing with our creditor country colleagues improvements in the terms. Specifically, we would like to see the full Trinidad terms implemented and earlier action on reducing the total stock of debt for debtors who have a good track record.
The Government have also cancelled nearly £200 million of old aid debts owed by sub-Saharan African countries which are successfully pursuing sound policies of reform. Altogether, we have relieved developing countries of the burden of about £1.1 billion of old aid loans. New aid to such countries is now provided only in the form of grants.
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