Image: Senegalese woman
Schalk Van Zuydam  /  AP
A woman sells fish at a market in Dakar, Senegal, in this Oct. 13, 2004 photo. Senegal is one of the 18 nations, all but three in Africa, that Britain and the United States are proposing to help by canceling debts owed to multilateral institutions like the World Bank.
updated 6/15/2005 6:37:13 PM ET 2005-06-15T22:37:13

Electric lights for a village clinic — a simple but profound change stemming from earlier debt relief — indicate what the future might hold for impoverished African countries in line to see billions in foreign debts written off.

Under the African debt cancellation initiative that the Group of Eight richest countries are set to adopt at next month's summit in Britain, the $2.5 billion Senegal owes to the World Bank, the International Monetary Fund and the African Development Bank will be completely scrapped.

As a hint of what this is likely to mean, consider the results for Cherif Lo of the $77.7 million already granted in debt relief in 2003.

The nation of 10 million used the savings in such areas as health, energy, road construction and education, including some $4.5 million for projects to improve electricity in rural areas like Cherif Lo.

"Can you imagine, I had to use this gas lamp in the delivery room. God only knows what I was doing in this poorly lit room," said Ndeye Ndiaye, the clinic's head nurse in this village 55 miles north of the capital, Dakar.

Now she sees patients even late at night and no longer has to defer writing prescriptions to the following day simply because the pharmacy has no light.

Mbaye Gueye, another Cherif Lo resident, flashed the lights on and off in his home as his mother explained how watching television has brought them closer to the world.

"Besides, studying now is a pleasure, I don't have to use a petrol lamp to do my homework," 13-year-old Mbaye said.

Finance Minister Abdoulaye Diop promised Senegalese will see more such change thanks to debt cancellation, which he said would free up some $222 million per year if the decision is retroactive to January.

Funding for social development
"The money generated from the debt relief will not be used to run state affairs or pay civil servants. It will instead fund social development programs," Diop told reporters this week in Dakar. "These additional funds will go to social sectors .... There will be a real impact if we invest in agriculture, education and health."

The debt agreement announced Saturday at a meeting of G8 finance ministers in London and negotiated by President Bush and British Prime Minister Tony Blair benefits Senegal and 17 other nations identified as success stories of a decade-old World Bank and International Monetary Fund initiative for heavily indebted poor countries.

The 18, most in sub-Saharan Africa, have met targets for good governance, poverty reduction and economic reforms. But another 20 in the World Bank-IMF program have so far been too hampered by corruption, poor governance, wars or other challenges to complete the reform stage. They, too, could be eligible for cancellation if they do.

Senegal has gained a reputation for stability on a continent mired by coups and civil wars. The peaceful election of President Abdoulaye Wade in 2000 ended four decades of Socialist rule. The country enjoys low AIDS and crime rates. But with few resources and an agricultural economy based primarily on peanut production, nearly two-thirds of the country's population is illiterate, hospitals and roads need repair, and youth unemployment is high.

More than half the population of the heavily indebted poor countries lives below the $1-a-day poverty line. One-in-six children die before the age of five from poverty related diseases and almost 50 million children are not in school.

The United States is the largest single provider of economic aid to Africa, but critics contend it is not doing enough because it has given a lower percentage of its gross domestic product in aid than other major industrialized countries.

Only part of the solution
Debt cancellation is only part of the solution for poverty eradication, activists say.

"The absence of proper export markets could simply lead to further debt," said Damien Millet head of the Committee for the Abolition of the Third World Debt in France.

"The solution is therefore to have both debt cancellation and find other source of funding such as donations," Millet said in a telephone interview from Paris. To break the cycle of poverty, Millet said industrialized nations should increase their official development assistance from 0.25 percent of donor GNP to 0.75.

In the meantime, the villagers of Cherif Lo are turning relief into development.

Ice vendor Astou Diagne had started her business in Dakar when her husband bought her a refrigerator. When he decided to move back to Cherif Lo in 2003, Diagne had to abandon her enterprise. Two months ago, when power came to Cherif Lo, she went back into business.

Diagne can make up to $120 a month, sometimes much more when the weather gets hot.

"For someone who was making zero money, it makes a big difference," Diagne said, while filling small plastic bags with water before placing them in her freezer.

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