Charlotte Denny Aid agency Oxfam has described the debt- relief package which the World Bank and International Monetary Fund (IMF) are offering Zambia as a “fraud”. Confidential papers from the IMF obtained by Oxfam show that Zambia’s interest payments are set to rise from $136-million (about R952-million) in 1999 to $235-million (about R1E645-million) in 2002, even though it is expected to enter the West’s official debt- relief programme in October this year. The increase is due to payments falling due on a large IMF loan. Oxfam has called on the fund to write off all the money owed to it by Zambia over the next few years instead of offering the country limited debt relief. The agency’s plea comes as it is revealed that Horst K”hler, new head of the IMF, and Jim Wolfensohn, president of the World Bank, are to hold an urgent meeting to discuss debt, after the failure of last month’s summit in Okinawa of the group of eight industrialised countries to agree to a more generous relief package. Leaders from five indebted countries are also meeting this week in London for a debt-relief summit, convened by Nigerian President Olusegun Obasanjo. Debt campaigners have slammed the slow progress of the World Bank and IMF’s heavily indebted poor countries initiative since Western leaders promised in June last year that 25 countries would benefit from debt relief by the end of 2000, and that $100- billion (about R700-billion) in Third World debt would eventually be written off. With four months to go to the deadline, only nine countries have formally qualified for debt relief and none has received any debt cancellation.
Oxfam says the Zambian case shows that the initiative is failing because the amount of relief on offer is inadequate, leaving most countries still spending more on interest payments than on health or education. Oxfam’s figures show that in six African countries – Mali, Burkino Faso, Tanzania, Mozambique, Zambia and Malawi – debt payments will outstrip spending on basic education even after the countries have graduated from the debt-relief programme.