Debt Relief (Africa) (Hansard, 7 November 2002)

§ John Healey

The Government are very concerned about food crises in Africa and is acting decisively to limit the impact of famine on those countries affected. We have already committed a total of £68 million for humanitarian assistance and recovery programmes to the region and will continue to monitor the situation closely. Of the eight countries currently affected by famine, 4 are already benefiting from US$11 billion of debt relief that has been committed under the HIPC initiative.

DfID's Southern Africa Humanitarian Crisis Unit (SAHCU) is currently being established in Johannesburg. The unit will assist the ongoing DfID response, carry out situation and needs assessments; and identify opportunities for further UK interventions if necessary.

As part of this commitment to providing humanitarian assistance, DfID is supporting infrastructure programmes, such as the rehabilitation of the rail link between the port of Nacala in Mozambique and land-locked Malawi. The improved link is essential to the special emergency operation being run by the World Food Programme on behalf of the Malawian government to get food to those most at need. The total cost of the programme is £4.26 million, £4.1 million of which will be funded by DfID.

In Malawi, Zambia and Zimbabwe food shortages have followed a poor season when coping mechanisms are already stretched. Poor governance has played a major role in the shortages, particularly in Zimbabwe where lack of inputs for small-holder agriculture, and the ruling party's disastrous economic and land policies, have both caused shortages and undercut survival strategies. Throughout the region HIV and AIDS has also weakened communities' capacity to cope with additional stress.

The crisis underlines the need for good governance in Africa. The three worst affected countries (Malawi, Zambia and Zimbabwe) have been hit by drought, but have also suffered in varying degrees from economic problems and poor governance, which have turned a fall in agricultural production into a crisis. The drought has been exacerbated by corruption in Zambia under the previous administration, poor management of food stocks in Malawi, and disastrous land and economic policies in Zimbabwe.

At the spring meetings of the IMF and World Bank, the UK argued strongly that we should be prepared to use the flexibility in the HIPC initiative to provide additional debt relief to ensure a robust exit from unsustainable debt, particularly for those countries affected by extreme circumstances.

The Government is working to strengthen the HIPC initiative to help the most vulnerable countries. In a speech to the United Nations General Assembly Special Session last year, the Chancellor set out the UK's agenda for strengthening the HIPC initiative. In addition to pressing for more cautious forecasts to assess debt sustainability, the Chancellor stressed the importance of additional debt relief (or topping-up) at Completion Point for those countries which have 769W experienced external shocks such as natural disaster. In order to deliver these reforms, the UK has called for a further $1 billion to the HIPC initiative.

At Kananaskis the UK was at the forefront of the international debate on debt relief, helping to secure agreement from the G7 that they fund their share of the $1 billion financing shortfall in the HIPC initiative. The UK is the second largest donor to the HIPC Trust Fund, pledging over $300 million in total since 1999.

Ahead of the September meetings the UK made clear that, once again, we were prepared to shoulder our share of the burden, and called on other countries to follow our lead. The Development Committee welcomed these announcements of support and called upon other countries to make firm pledges and contributions as early as possible. I am pleased to report that, at a recent HIPC Technical Meeting in Paris, not only did the UK reaffirm its commitment to providing $120 million towards the $1 billion financing gap, but was joined by nearly all donors in making firm commitments totaling around $850 million.