Uganda, one of the first countries to benefit from the debt relief programme, has been commended for using the savings from cancelled debt payments to improve primary education. Countries participating in the debt-relief programme like Uganda must work out detailed plans with lenders to ensure that politicians and local leaders don't steal or squander the money saved on debt service. Personally I have always been lukewarm about debt forgiveness. I think in the long term it is bad policy, because it sets a negative example, and gives the leaders of poor countries too easy a way out. Take Uganda where the wrong notion is widespread that money which is borrowed from banks and international institutions is not supposed to be paid back.
People borrow money and default.
Business people supply the government with goods and services and they don't get paid. The country borrows money from donors and international financial institutions and promptly falls behind on its payments. Now there are moves to write those bad loans off, so the big cats will have got millions of shillings free. The same scam happened with the closed International Credit Bank. Big wigs in government and businessmen with connections got ICB to buy their bad loans from international banks like Stanbic which don't accept our native nonsense of fooling around with other people's money.