From: barnhart@ddsw1.MCS.COM (Mr. Aaron Barnhart)
Subject: IPS:AFRICA: Debt crisis far from over for sub-Saharan region/EMBARGO/
Date: Wed, 30 Dec 1992 01:23:35 GMT
Organization: Evanston, Illinois, U.S.A.

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Title: AFRICA: Debt crisis far from over for sub-Saharan region/EMBARGO/


/att editors: the foll. copy is under embargo and may not be
printed or otherwise reproduced before thursday dec. 17/

new york, dec 17 (ips) -- for the severely indebted low-income
countries of sub-saharan africa, debt-servicing remains
unsustainably high in relation to export earnings and gross
national product (gnp), according to a new world bank report.

the report, 'world debt tables, 1992-93', released in
washington thursday, says that while the pattern of external
resource flows to developing countries has changed significantly
in recent years, the situation of severely indebted low-income
countries (silics), which include sub-saharan nations, has
remained relatively unchanged.

thus while the debt crisis that began a decade ago is largely
over, the report states that ''the crisis is certainly far from
over'' for many sub-saharan countries ''who are indebted largely
to official bilateral creditors and whose debt burdens are, in
some cases, unsustainably high.''

the report states that while africa's sub-saharan countries
continued to receive external official support ''at historically
high levels...the majority of them remain far from external
viability.''

for example, it points out that the debt-to-exports ratio for
silics is projected at 411 percent in 1992, and the debt-to-gdp
(gross domestic product) ratio at 113 percent.

according to the 223-page report, the total debt of the silics
rose by 1.6 percent in 1991 to 177.1 billion dollars. this, it
says is a relatively small proportion of the total external debt
of all developing countries, estimated at 1,703 trillion dollars
in 1992. in 1991, the figure was over 100 billion dollars.

much of the reason for the increase in third world debt is
because of the external debt of the former soviet union which is
estimated by the bank at around 67.2 billion dollars at the end of
1991.

the report adds that ''for some, reducing debt burdens to
sustainable levels looks increasingly difficult within existing
official debt reduction schemes''.

to this end, the bank states that ''additional debt forgiveness
will be necessary for many of them if they are to reduce their
currently unsustainable debt burdens.'' (more/ips)

africa: debt crisis far from over for sub-saharan region/embargo/(2)

africa: debt crisis (2)

and it notes that the ''challenge'' ahead ''is assuring enough
concessional funding for their future development needs, at a time
when aid budgets are growing more slowly than is the number of old
and new claimants on these limited funds''.

in fact, according to the report, of the 18 billion dollars
committed by the world bank in 1991, africa received only six
percent of the bank's commitments, compared to latin america's
share (28 percent), europe and central asia (23 percent), east
asia and the pacific (22 percent), the middle east and north
africa (12 percent), and south asia (9 percent).

however, africa was the largest recipient of commitments by the
international development association (ida) -- the 'soft-loan' arm
of the world bank -- receiving a 40 percent share of commitments,
followed by south asia (30 percent), and east asia and the pacific
(20 percent).

but the report points out that these ''constraints'' have
resulted in a stagnation in net flows to the low income developing
countries during both 1991 and 1992.

and while foreign direct investment in developing countries as
diverse as bangladesh, china, hungary, and the philippines during
1991-1992 surged to a total of roughly 38 billion dollars, new
investment largely bypassed the poorest african countries.

north africa and the middle east, however, are projected to see
a substantial increase in foreign direct investment flows from 0.7
billion dollars in 1991 to 2.1 billion dollars in 1992.

according to the report, the external financing needs of the
severely indebted low-income countries have been met during the
1980s through strong official support with highly concessional
finance, extensive debt rescheduling and official development
assistance (oda) forgiveness.

but the bank warns that oda forgiveness which had been
substantial in 1990 and 1991, ''will probably not surpass four
billion dollars in 1992,'' and that grants to severely indebted
low-income countries are projected to fall by more than four
billion dollars in 1992.

the report also points out that because net flows on debt have
remained positive for these countries throughout the 1980s, their
outstanding debt has continued to grow and has led to ''debt
service obligations that are well in excess of sustainable
levels.''

it adds that the debt problems of this group of countries is
exacerbated by ''structural weaknesses in their economies,
including poor infrastructure, low levels of skilled man-power,
and undiversified exports''.

in addition, it notes that ''adverse terms-of-trade shocks in
the mid-1980s led to a declining non-interest current-account
balance (excluding official transfers) and repeated recourse to
rescheduling, and to the run up of arrears.''

sub-saharan countries affected include ethiopia, kenya,
mozambique, niger, somalia, the sudan, tanzania, uganda and zaire.

africa: debt crisis far from over for sub-saharan region/embargo/(3-e)

(end/ips/jd/yjc/92)


Conf: (i)ndex (u)nread (w)rite (c)apture (v)isit (g)o e(x)it (q)uit (?)
Conf?  938


Topic 938       /CORRECTION/ AFRICA: Debt crisis...
newsdesk        ips.englibrary  12:10 am  Dec 19, 1992

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Title: /CORRECTION/ AFRICA: Debt crisis...


att editors: please make the following correction to the item,
'africa: debt crisis far from over for sub-saharan region'

take one, paragraph six should read as follows:

according to the 223-page report, the total debt of the silics
rose by 1.6 percent in 1991 to 177.1 billion dollars. this, it
says, is a relatively small proportion of the total external debt
of all developing countries, estimated at 1,703 trillion dollars
in 1992, an increase of over 100 billion dollars from the 1991
figure.

please note the corrected reference to the 1991 figure.