Ishrat Husain
John Underwood (1)
I. Introduction
1. The countries of Sub.Saharan Africa are the most indebted, relative ti the size of their economies, of all developing countries. Yet, the debt situation of Sub-Saharan African countries is not monolithic. Many are severely indebted, most often to official bilateral creditors. A few of Africa's severely indebted countries, such as Nigeria, are predominately indebted to commercial banks. Still others, including Botswana and Swaziland, are free of debt problems. This paper attempts to describe the debt dilemma of Sub-Saharan Africa, taking into account the diversity of circumstances, to illustrate the need for a variety of measures to address these difficulties, and to assess the impact of the official response to date.
2. The paper is organized as follows. Section II describes the existing debt and debt service situation of Sub-Saharan African countries. It attemps to answer the following questions: Who are Sub-Saharan Africa's external creditors? How large is the debt burden? Is there a debt overhang? Section III assesses Sub-Saharan Africa's need for debt relief in the context of external financing needs. Section IV reviews the impact of the official response to the debt crisis on the external financing situation of African countries, and highlights possible measures that could strengthen the debt strategy. Section V summarizes the paper's findings.
II. The Magnitude of Sub-Saharan African Debt
3. At the end of 1990, Sub-Saharan Africa's debt was about $161 billion, roughly 12 percent of the total debt of developing countries. (See Table 1.) Compared to Latin America's debt of $428 billion, Sub-Saharan Africa's debt appears small. Yet, standard debt indicators show that, relative to its current productive capacity, Sub-Saharan Africa is at least as seriously indebted as Latin America. Debt, relative to GNP was 112 percent in 1988 in Sub-Saharan Africa and 48 percent in Latin America. In the same year, SUb-Saharan Africa made debt service payments equal to 24 percent of exports. This latter statistic should not be taken as an indication of a lighter debt burden in Africa. Scheduled debt service payments were about 50 percent of export earnings in both regions. Lower actual debt service payments in Africa are a measure of the weaker and poorer economies in the region.
4. Debt servicing difficulties are pervasive across the continent. Of the forty-four countries in the region, thirty have resorted to rescheduling, most often bilateral official debt reschedulings at the Paris Club. Twenty-four Sub-Saharan African countries are classified, on the basis of objective indicators of debt burden, as severely indebted (2). Only three (Burundi, Ghana and Kenya) among the severely indebted group have not rescheduled their debt or run up arrears in the last eight years.
Poverty and Related Structural Weaknesses
5. Two factors make Sub-Saharan AFrica's debt a greater burden than the debt of other highly indebted regions: the greater poverty in Africa and the more serious structural weaknesses of African economies. Only eleven Sub-Saharan African countries are classified as middle-income (per capita incomes of more than $480 annually) and most of those are in the lower range of the category. The other thirty-three countries are in the low-income category (3). Only five Sub-Saharan African countries (Nigeria, Cote d'Ivoire, Cameroon, Gabon and Zimbabwe) are current borrowers from the IBRD at market-related terms. The remaining countries borrow from IDA--the concessional window of the World Bank Group.
6. The situation is exacerbated by the more pronounced structural weaknesses of most African countries compared to middle-income countries that face a similar severity of debt burden (the severely indebted middle-income countries or SIMICs). The data in Table 2 illustrate the contrast between the two groups (Only three Sub-Saharan African countries are SIMICs: Congo, Cote d'Ivoire and Senegal).
7. Low-income African countries are not onlu poorer but are smaller than SIMICs. Their lack of a diversified export base makes it more difficult for them to adjust to changing world economic conditions. Population growth is higher, which means that achieving per capita income growt is more difficult. Education and health demands are greater. The infant mortality rate is about double that of SIMICs. Only about tw-thirds of the school-age population attend primary school. Investment levels are lower, and investments that are made tend to be less productive.
Origins of the Debt Problem in Africa
8. One of the factors leading to the debt difficulties facing Sub-Saharan Africa has been the terms of trade shocks that hit the continent. Excluding Nigeria, Sub-Saharan Africa's terms of trade declined by 25 percent between 1980 and 1988 (4). Many countries, including oil producers like Nigeria, borrowes on the assumption that high prices for their major commodities would persist. Others borrowed on the assumption that price declines would be temporary (5). Besides terms of trade shocks, primary commodity production problems contributed to debt difficulties in countries like the Congo and Zambia.
9. Poor policies in many Sub-Saharan African countries have accentuated the economic difficulties growing out of external shocks in the face of structural rigidities. An inability to diversify exports over the short rum has limited the capacity of African countries to cope with shocks. This problem is compounded by the region's failure to maintain export shares in non-oil primary commodities. Low-income Africa's export volume is now lower than in 1970.
10. The terms of trade shocks and policy problems are reflected in aggregate economic data. Nominal GDP per capita declined from $612 in 1980 to $485 in 1990. The nominal value of exports of goods and services has declined over the decade. Thus all debt indicators for sub-Saharan Africa have deteriorated significantly, and the debt burden has often become unmanageable.
11. In many Sub-Saharan African countries, debt problems are now more than a sumptom of the growth and adjustment problems. The preconditions for Africa's long-term growth are by now quite well articulated: the need for stable macroeconomic conditions, a major recovery in private savings and investment, the importance of a supportive external economic environment, and long-term strategies for human resource development and capacity building (6). Yet, debt represents a drag on government adjustment efforts and an obstacle to renewed private investment by residents and nonresidents alike. Empirical evidence shows that a debt overhang - a situation in which a reduction in the face value of debt would likely increase the expected value of future debt service payments - is more likely in Africa than in any other region (7). The solution to the crisis will not be simple, policies designed to address the African debt crisis must take into account the wide range in the sources of and terms of African debt.
The Diverse Nature of African Debt
12. Despite the large number of rescheduling countries, the debt situation of Sub-Saharan Africa cannot be simply characterized. It varies across different groupe of countries. These country groups can be distinguished on the basis of several analytical characteristics, including the level of per capita income, the severity of the debt burden, and the predominant creditor source.
13. Twenty-four of the 26 severely indebted low-income countries (SILICs) are found in Sub-Saharan Africa. Three other Sub-Saharan African countries, as noted above, are SIMICs. Only nine Sub-Saharan African countries are classified as neither seriously nor moderately indebted: Botswana, Burkina Faso, Chad, Djibouti, Lesotho, Mauritius, Rwanda, Seychelles, and Swaziland. (A unique set of internal circumstances has led to debt difficulties in Chad in spite of relatively favorable debt indicators.)
14. Table 3 categorizes Sub-Sahran African countries by major type of debt. The categorization is based on 1989 scheduled service on long-term debt (8). SCheduled debt service is a better measure than debt itself for this classification because the former gives an appropriately lower weight to highly concessional debt. All but six Sub-Saharan African countries are classified as official-source borrowers. Within this group, three countries are mainly indebted to multilateral creditors. None are severely indebted. Another 21 are mainly indebted to bilateral creditors. Most are severely indebted. Fourteen others are classified as mixed official borrowers, with a balance of multilateral and bilateral official debt. A smaller share of countries in this group is severely indebted. This latter group tends to hold heavily concessional debt, while countries in the former group tend to have debt at harder terms.
15. Another six countries Congo, Cote d'Ivoire, Niger, Sudan, Seychelles, and Zimbabwe, are mixed private/official borrowers. All but Sudan are middle-income countries and all have heavily non-concessional debt. Nigeria owes almost half of its debt service to private creditors. Thus, for Nigeria, debt relief from private creditors will be of utmost importance in dealing with its debt problems. For most other Sub-Saharan African countries, bilateral official creditors are the major players in debt relief negotiations.
16. Antoher useful categorization of African countries is by type of economy, often synonymous with major type of export. Debt data on this basis are shown in Tables 4 through 10. Five countries are categorized as oil exporters. Data for four of the countries (excluding Angola, for which data are not available) are shown in Table 4. These countries, as expected, have mainly bilateral nonconcessional and private-source debt. All face debt servicing difficulties in sppite of their oil resources. African mineral exporters, such as Zaire and Zambia, have predominately nonconcessional bilateral official debt, reflecting their more limited creditwothiness in their heavy borrowing period. Apart from Botswana, all face immense debt servicing difficulties. Countries that are mainly agricoltural exporters are less homogeneous. Sudan and Cote d'Ivoire once had access to a large volume of bilateral nonconcessional and commercial bank credit. The other three, Ghana, Malawi, and Uganda borrowed chiefly from official sourc
es and at softer terms on average. All but Ghana experienced repeated reschedulings and arrears problems. The four countries that are classified as diversified economies, Kenya, Mauritius, Swaziland, and Zimbabwe, also borrowed from diversified sources. It may not be a coincidence that all of these more diversified economies have avoided the serious debt servicing difficulties common to other African countries with more concentrated sources of export earnings. The countries of the Sahel have fragile economies dependent on capricious weather conditions. Most have debts mainly to official creditors, with a heavily concessional component. Nonconcessional debts may be inappropriate for these countries for the foreseable future. Two groups of countries remain. The first are small economies, These countries' debts for the most part are official. Most had no access to private markets. Half have highly concessional debt. The last groups os a set of least developed economies. All except Rwanda have esperienced debt s
ervicing difficulties on debt that is highly official and concessional. A trand evident in all these country groupings is a movement away from private debt and toward official debt. Excluding arrears, private debt (mainly to commercial banks) dropped from 40 percent of total Sub-Saharan African debt in 1980 to 25 percent in 1989.
17. The data on actual payments show a different pattern than the data on sheduled payments. (See Table 11.) Multilateral creditors received preferred treatement. With few exceptions, African multilateral debts were fully serviced in 1989. Bilateral official creditors were last in line, receiving about one quarter of debt service due to them, while private creditors were paid more than one half. These results are generated by the behavior of a few big debtors, such as Nigeria and Zimbabwe, that serviced their private debt. (Since then, Nigeria has limited payments on its private debt.) Payments to private creditos have been virtually suspended by a majority of African countries. Short-term debt service, not shown in Table 11, is an exception. Most countries try to service fully their valuable active short-term trade credits, even when they are accumulating arrears on long-term debt owed to the same creditors.
18. The movement of vulnerability coefficients of the debt of Sub-Saharan Africa during the 1988-90 period presents a mixed picture. On the positive side, tha share of variable interest rate denominated debt is gradually declining; the average cost of new funds has almost halved and the proportion of concessional debt has increased significantly. On the other hand, the risk has become more concentrated among official creditors and the debt structure has become more inflexible as preferred creditors have a rising share in net flows to the countries in this region.
III. The Need for Debt Relief
Debt Relief for Adjustment
19. The following question arises: is there an economic rationale for concessional debt relief for Sub-Saharan Africa? The most persuasive arguments (9) to support debt relief are centered around debt overhang effects (mentioned earlier) and liquidity constraints, i.s., the perverse incentive effect of a large debt outstanding on the willingness of the country to adjust and invest and on the willingness of the creditors to provide new financing. Without an injection of liquidity, additional investment is costly to the debtor as current consumption must be reduced, an unattractive alternative after a decade of austerity that has lowered per capita consumption and income to levels below those of the early 1980s. Moreover, the future benefits of austerity and investment will be shared between the debtor and the creditors, with a larger share of the benefits going to the creditors the more indebted the country is.
The debt overhang thus creates disincentives for growth by acting as a tax on adjustment efforts: as the share of output a debtor has to transfer overseas increases, further austerity now for the sake of future growth becomes less attractive. The best outcome for creditors is likely to be a situation in which an adequate amount of debt relief is provided on the assurance that the benefits will be invested -- in the context of appropriate adjustment policies -- leading to added capacity to service debt in future years.
20. Adjustmente is underway in Africa. There has been considerable progress in a large number of African countries in the last few years to improve the structure of incentives, efficiency and competitiveness. Major efforts have been made to maintain realistic exchange rates, pay remunerative prices to agricolture producers, dismantle state ownership of enterprises and promote the private sector.
21. The serious adjustment efforts of 23 low-income African countries have been recognized by donors and creditors; these countries are eligible for external support under the World Bank sponsored Special Program of Assistance (10) (SPA). Nigeria, although a low-income country, is a unique case. While it is not currently eligible under the SPA because it is an IBRD borrower, its adjustment efforts have been recognized by the international community. In the SPA countries, inflation has been contained while fiscal deficits have been sharply curtailed. Merchandise exports, in volume terms, have taken an upward turn but terms of trade losses have neutralized these gains. The pace of progress has, however, not been rapid enough to avert a decline in per capita incomes.
22. It is essential that the resolve and willingness of the African countries to pursue serious economic reforms and restore growth should be comlemented by an adequate flow of external resources at terms and conditions that are commensurate with the current financial standing of these countries. Experience has shown that, without adequate external support at appropriate terms, adjustment in highly indebted countries is likely to fail.
Financing Requirements for Growth
23. The debt problem of most African countries should be examined first in the broader context of their financing requirements in the coming decade. These financing requirements were estimated in paper prepared by World Bank Staff (11). To achieve a 4 percent annual growth rate of GDP (five percent by the end of the decade), it is postulated that total investment in Africa will have to average 21 percent of GDP, a substantial increase from the current 11 percent level. The foreign savings required to support the postulated investments rate would average 6 percent of GDP. One of the reasons for such high rates of foreign resource use stems from the poor prospects of world prices for most primary commodities exported by Africa and the need to restore a minimum level of imported raw materials and capital goods for investment. Even assuming that this outcome materializes, per capita income is projected to grow by less than one percent annually. Overall per capita consumption will stagnate. The assumptions underl
ying this likely outlook are predicated on successful and sustained adjustment programs. Under these assumptions, the average annual level of foreign savings needed to finance SUb-Saharan Africa's recovery over the next decade is about $11 billion.
24. Gross foreign financing available to Sub-Saharan is projected to be about $22 billion, 50 percent loans, 40 percent grants and 10 percent foreign direct investment. In addition to the grants, a large share of the loans are projected to come from official sources. Because of budget constraints in donor countries, an increase in official concessional assistance beyond historical levels, relative ti donor GNP, appears unlikely. Few Sub-Saharan AFrican countries are likely to be able to borrow from market sources during the decade. Market-rate debt, in any case, is inappropriate for most low-income African countries, given their short-term growth prospects. This projected level of external financing would leave $11 billion available for debt service. Scheduled debt service will average $16 billion to $18 billion during the decade, taking into account the impact of debt relief measures to date.
25. The goal of African adjustment programs is growth with external viability. External viability implies that debtor countries can mest import bills, scheduled debt service, and other external resource needs from export earnings and financial inflows, without recourse to rescheduling or external payments arrears. As discussed above, sustainable growth is not likely without external viability. If Africa is to achieve external viability over the next decade, additional measures equivalent to an annual reduction in debt service of about $6 billion, or 35 percent of scheduled debt service, will be required (the difference between scheduled debt service of about $17 billion and the $11 billion identified above as available for debt srevice). The 35 percent is an average across countries. A similar analysis for the most severely indebted of the low-income African countries indicates that additional measures averaging roughly 70 percent of currently scheduled debt service would be required to restore external viab
ility.
26. Another approach to estimating the debt relief needs of Sub-Saharan Africa is the following. If it is accepted that a reasonably good indicator of the debt servicing capacity of these countries is their actual performance in recent years, then about 25 of exports of goods and services is the maximum amount of debt service that can be expected, at least in the next five years. That ratio translates into debt service payments averaging about $11 billion over the decade. Hence, this alternative approach identifies the same rough magnitude of needed debt relief if Sub-Saharan African debtor countries are to achieve external viability, with scheduled debt service ratio should not be stipulated as a target, as some countries might try to understate their exports attained the higher will be the amount of debt servicing they are required to pay. It would also be inadvisable to set this as a target of debt servicing for any individual country, as country circumstances differ considerably. Kenya and Burundi, for e
xample, are both severely indebted and have very high debt servicing ratios. But they have chosen the policy option of fully servicing their debt and attracting new flows. The purpose of using this empirical observation concerning debt service ratios is purely illustrative; to identify in quantitative terms the broad order of magnitude of debt relief required by Africa in the context of successful adjustment programs, to relate these requirements to the debt relief granted to date, and to estimate the additional requirements for external viability.
27. These estimates need to be qualified further. First, the weight of Nigeria, Cote d'Ivoire, and Zaire is significant -- accounting for roughly half of the total scheduled debt service payments. Second, not all of the countries in the group will be eligible for debt relief. Some of them have not yet put in place credible adjustment programs. Third, the requirements would vary from country to country, as some countries may not need any additional relief beyond that already available. Fourth, the capacity to service debt depends on the volume of real net capital inflows including official grants and the repatriation of flight capital exceed the amounts assumed for these flows in our projections, then the requirements for debt relief will be reduced. Sixth, if real oil prices turm out to be high over the decade, a few African countries will require less external assistance, but most of the severely indebted low-income countries will face more serious financing constraints. Finally, but most important, if marg
inal domestic saving rates are higher in the future than historic trends suggest, the need for external resources can be reduced ot, alternatively, growth rates can be accelerated. In view of the substantial decline in per capita incomes in the 1980s, the case for achieving faster growth rates through higher investments brought about by higher domestic savings is more persuasive.
28. The next question is the specification of criteria that should govern the eligibility of countries to obtain debt relief. The first criterion should be the income level, a low level of per capita income and IDA eligibility (per capita income below $480) could be used as the cut off point. The second criterion should be the existence of an economic adjustment program approved by the IMF and the World Bank and on track. The third criterion should be the severity of debt burden. The critical values of objective indicators used in classifying countries as severely indebted could govern the eligibility. Thus, a low-income severely indebted country that is pursuing an economic adjustment program would be eligible for debt relief from creditors. These eligibility criteria are congruent with those of the SPA.
29. In the event the case for this additional debt relief is established, the logical question that arises is: how can this additional debt relief be structured and who provides it and in what proportions? To answer this question the pattern of debt servicing payments due to various creditors needs to be analyzed in the context of the actions these creditors have taken in response to the African debt crisis.
The Policy Response to the African Debt Crisis
Multilateral Creditors
30. In 1989 multilateral institutions (excluding the IMF) had $31 billion in debt outstanding to Sub-Saharan Africa (30 percent of the total) and accounted for $2.6 billion of Sub-Saharan Africa's scheduled debt service (15 percent of the total). Of this, two-thirds was principal repayment and one-third was interest. This multilateral debt burden has grown considerably from 1980, when multilateral institutions had only $8 billion in debt to African countries south of the Sahara and accounted for less than $1 billion of debt service.
31. The debt service burden cannot be divorced from the availability of new loans and ODA grants, an important consideration in the case of multilateral institutions. These institutions increased their loan disbursements to Sub-Saharan Africa from $1.7 billion in 1980 to $3.8 billion in 1989, of which a growing proportion is concessional (currently about two-thirds). As a result, multilateral net lending flows (disbursements less repayments) increased from $1.5 billion to $2.8 billion and net transfers have also remained positive at $1.8 billion. More than $2 billion is also provided as ODA grants by multilateral institutions such as the UN and EDF. IMF net purchases have turned negative, reflecting repurchases resulting from large IMF programs in the early 19802 (12).
32. The IBRD is pursuing an active policy to stop lending non-concessional funds to most African countries, while making available increased concessional funds. New commitments of IBRD loans to Sub-Saharan Africa (excluding Nigeria) have virtually dried up in the last three years. In the case of IBRD, its negative flows are more than offset by $1.3 billion in net new flows from IDA. These net flows should increase to well over $1.6 billion per year in FY91-93. Not only are aggregate flows positive, but in each country with an adjustment program, IDA lending is considerably larger than IBRD repayments.
33. However, there is still the question of whether it is appropriate for IDA-only countries to service non-concessional multilateral debt. In September, 1988 the Governors of the World Bank approved an allocation of 10 percent of IDA reflows and investment income to eligible countries in proportion to their IBRD interest payments. Supplemental IDA adjustment credits totalling about $100 million have been provided to ten Sub-Saharan African countries. Funs provided under IDA's interest financing facility are equivalent to about 60 percent of their annual IBRD interest obligations. In support of this initiative, Norway and Sweden also made grants available to help meet IBRD debt service in four African countries. Funds currently available will allow IDA to provide new credits ewuivalent to up to 100 percent of scheduled IBRD interest payments. As IBRD debt is paid off, the percent of interest covered under this program should rise. In the long term this program is self-limiting in the sense that the bulk of t
he IBRD loans to IDA-only countries are scheduled to be repaid by the end of the 1990s.
34. The IMF has also increased its soft loan capabilities -- the Structural Adjustment Facility (SAF) and the Enhanced Structural Adjustment Facility (ESAF) -- to offset reduced non-concessional lending. After four years of SAF operations, by end-April 1990, SAF arrangements had been approved for 20 countries in Sub-Saharan Africa. The total amount committed for these countries was $683 million, of which $493 million was disbursed. As of end-April, eight ESAF arrangements had been approved for severely indebted low-income countries. The total commitments for the three year period amounted to $1.6 billion of which $875 million had so far been disbursed. As SAF/ESAF is disbursed over the next few years, the IMF's negative flows would also be reduced. These concessional disbursements will have the effect of replacing outstanding purchases at market-related terms with debt at concessional terms and result in a lower debt and debt servicing burden for African countries in the future.
35. A small group of IDA-only countries has accumulated large arrears to multilateral institutions. Their problem cannot be satisfactorily resolved unless there is a marked improvement in their economic performance and policies. As a result of their poor performance, only limited IDA lending is maintained in these countries. IDA-9 negotiations stressed the need to maintain performance as a principal criterion for lending. Until these countries undertake credible economic reforms, additional funds are unlikely to be well spent to reduce their debt burden. Countries such as Zambia and Sierra Leone that are taking difficult measures to reform their economies have received sympathetic support from their creditors. The two available mechanisms, the collaborative support group and the IMF "right approach" (13), are likely to be used in both cases.
36. For multilateral creditors, the preferred strategy remains the provision of new money, if possible, at concessional terms to countries making serious adjustment, leveraging this new money with confinancing and coordinated financing with other creditors, allocating funds for buyback of commercial debt and, in effect, subsidizing the interest payments falling due on previously contracted non-concessional debt. The gradual replacement of IDA dor IBRD lending and SAF/ESAF for conventional IMF credit in the debt stock of recipient countries over the next several years will significantly alter the composition of their debt and debt service in favor of more concessional multilateral debt and easy terms of servicing.
Bilateral creditors
37. Official bilateral lenders are Sub-Saharan Africa's main creditors. These creditors have an outstanding exposure (including claims they have guaranteed) of $73 billion in Sub-Saharan Africa countries. The scheduled debt service payments on official bilateral claims amount to about $10 billion annually, or over 50 percent of the total amount due. The largest single group of bilateral creditors are the Paris Club creditors. They are owed $51 billion or almost 40 percent of the total outstanding debt of Sub-Saharan Africa and an equivalent share of the debt service due. Much progress has been made in reducing the official bilateral debt burden of African countries. The official bilateral creditor community, particularly, the member countries of the DAC and the Paris Club, which unlike private creditors has a long-term commitment to the development of low-income countries, deserves recognition for the actions undertaken during the past several years to ameliorate African debt problems. These actions can be b
roadly divided into three main initiatives.
(a) Increased flow of concessional aid
38. Sub-Saharan Africa has emerged over the last two decades as the major aid receiving region. From less than 10 percent of total ODA in 1960, it accounted for more than 30 percent by the late 1980s (14). In the 1980s, bilateral aid to Sub-Saharan Africa grew considerably more strongly at 4.3 percent p.a. than total DAC ODA (2.9 percent p.a.). The volume of net ODA flows to Sub-Saharan Africa in constant prices and exchange rates rose frome $8.9 billion in 1978 to $14.7 billion in 1988 -- an increase of over 60 percent during the decade. The first phase of the SPA is near completion and provided an additional flow of quick-disbursing concessional funds on the order of $6 billion over the 1987-90 period. Twenty-three countries have benefited from this program. The second phase for the period 1991-93 has been formulated and the proposal received positively by the donor community at a recent meeting. The likelihood of achieving the target of almost $8 billion over the three year cycle appears strong.
(b) Debt forgiveness by official bilateral creditors
39. Thirteen donor countries in the OECD have so far announced or implemented plans to cancel or convert bilateral loans owed by various low-income African countries into grants. (See table 12) The total amount of debt forgiven or converted for African countries since 1987 to date is roughly $7 billion, including an estimate for 1990 (15). Virtually all of the debt forgiven was concessional, arising from earlier ODA activities. SCheduled debt service payments of these countries in 1990 were lower by an estimated $400 million as a result of this ODA debt forgiveness. The impact on debt service has been small in the aggregate, because of the highly concessional nature of these loans. Moreover, most of beneficiary countries would have rescheduled these payments in any case. Typically, concessional debt service is rescheduled on concessional terms, thereby increasing the grant element and reducing the burden. Countries that do not reschedule their debt previously have benefited more substantially from ODA loan f
orgiveness. Debt forgiveness also represents an emerging consensus among the official bilateral community that it is essential not just to reschedule but to reduce the stock of debt. Debt forgiveness also reduces the sizable administrative burdens associated with periodic reschedulings by eliminating these ODA loans.
40. An important unresolved issue is the source of funding for debt cancellations or conversions. If the donors rely on recycling of earlier aid ti fund new programs or utilize budgetary aid collocations for this purpose and in turn reduce new aid allocations by a comparable amount of forgiveness, the impact is not beneficial. But if the level of new grants and concessional loans to these countries remains unaltered (adjusting for projected growth) then debt forgiveness has positive effects in terms of net lows available to the beneficiary country, without reducing aid flows to other countries.
(c) Paris Club reschedulings
41. The Paris Club has eased the terms on which official bilateral debt is rescheduled for severely indebted low-income countries over time. The most recent terms at which seventeen low-income African countries have obtained Paris Club reschedulings consists of a menu of options that include the cancellation of one-third of the amount concolidated, very long maturities, (25 years) and a reduction in interest rates (16). More than $5 billion has been consolidated under these "Toronto" terms since October 1988 (See Table 13). The cash flow savings as a result of these reschedulings amount to about $100 million on an annual basis. There are several reasons for these limited amount cash flow savings:
(i) The concessions apply only to debt maturing in a given consolidated period, an average of about 16 months.
(ii) The standard reschedulings granted to low-income African countries by the Paris Club, that are the reference for estimating cash flow relief, already provide 100 percent rescheduling of principal and interest.
(iii) Not all potentially eligible debt has been included under the Paris Club arrangements; some is debt service on loans past the cut-off dates and some previously rescheduled debt has not been rescheduled.
42. However, if the cash flow relief is calculated in relation to the original contractual terms of agreements, the amounts are significant. For the same seventeen African countries which obtained the reschedulings since October 1988, the cash flow savings were almost $5 billion. While reschedulings are necessary for cash flow relief, they add to the build-up of debt. About 40 percent of the long-term non-concessional debt of rescheduling countries in low-income Africa owed to Paris Club at the end of 1988' represented interest capitalized by the Paris Club.
43. The benefits of Toronto terms will grow over time, as more countries reschedule under the Toronto umbrella and as Toronto-term reschedulings are repeated for eligible countries. With repeated Toronto-term reschedulings, debt service payments due to Paris Club creditors from rescheduling countries eventually would be about 20 percent lower, compared to repeated standard reschedulings.
44. Several creditor countries opt to reschedule their nonconcessional debt by extending maturities and charge moratorium interest at market rates. If these creditors instead chose one of the other options, either cancelling one-third of the consolidated amount or reducing the interest rate by 3.5 percentage points (17), the reduction in the present value of scheduled debt service would increase to 30-33 percent.
45. Paris Club creditors traditionally have addressed Sub-Saharan Africa's debt problems on a flow basis. Reschedulings cover only the debt service coming due over the consolidation period, usually the period covered by the prerequisite IMF program. Because the average consolidation period for Toronto-term reschedulings has been 16 months, only about one eight of the eligible debt of these countries has been touched. An alternative would be to reschedule the entire stock of debt (as is the practice in many commercial bank debt reschedulings and debt service reduction operations). The agreements could contain recapture clauses, tied to favorable exogenous events, in order to avoid a debt reduction that is, ex post, excessive. (18)
46. The rescheduling and debt relief efforts have so far been exclusively focussed on the Paris Club creditors, who have gone a long way to respond to the changing needs of the low-income countries. Less attention has been given to other bilateral creditors -- the OPEC countries, the CMEA and a host of other creditors. Table 3 shows that 11 African countries owed more than 25 percent of total 1989 debt service to non-Paris-Club bilateral creditors. In som cases the borrowers are accumulating arrears that consequently add to the debt stock and debt service obligations over time. In others, bilateral arrangements have taken place that are not publicly known. An orderly resolution of this problem, either through rescheduling, cancellations, or reductions in principal and interest (perhaps through new concessional lending), is required to accompany the Paris Club concessions.
Private Creditors
47. Except in Nigeria, private creditors have played a minor role in the external financing of Africa. Their relative contribution has further declined in the last decade. The outstanding long-term debt owed to private creditors by all Africa was $34 billion in 1989 and $22 billion if Nigeria is excluded, less than 15 percent of the total debt (excluding interest arrears). Scheduled debt service payments were only $4.2 billion ($2.2 billion excluding Nigeria). In 1980 the corresponding share of private creditors in total debt service of Africa (excluding Nigeria) was 43 percent.
48. However, there are several severely indebted low-income countries besides Nigeria with excessive commercial debt. These include Benin, Mozambique, and Niger. The IDA debt reduction facility, established in 1989, will provide grants up to $10 million per country to the countries with adjustment programs to buy back or exchange commercial bank debt at a discount. Fourteen African countries with commercial bank debt of $1.6 billion have requested the use of this facility and negotiations are most advanced for Niger. IDA Executive Directors have approved a $10 million grant for commercial bank debt reduction there, and other countries have provided supporting grants. If all of these countries eventuallu make use of this facility, and depending on the discount obtained, its resources may eventually need to be replenished. Much of the delay in drawing the resources of the facility is due to the reluctance of banks to participate, in part to avoid setting precedents for other countries where their exposure is l
arger.
49. Nigeria's debt to private creditors (excluding loans guaranteed by official creditor agencies) amounted to $12 billion at the end of 1989. Debt-servicing payments after rescheduling of promissory notes and agreements with commercial banks and the Paris Club will account for roughly 40 percent of exports of goods and services next year. This is clearly an untenable situation which cannot last. A debt workout for Nigeria with private creditors is clearly desirable.
50. Finally, there are a few countries whose debt burden is almost equally divided among the bilateral, multilateral and private creditors. For them, equal burden sharing in debt relief and/or new flows make the difference rather than action by any single group of creditors.
Direct Foreign Investment and Capital Flight
51. As a supplement to increased aid flows and reduced debt service payments, African countriess may consider other options for meeting external financing needs in the 1990s. Two of these options are increased foreign direct investment (FDI) and reflows of flight capital held abroad by African residents.
52. FDI lows to Africa are estimated at less than $500 million annually during the last three years and account for about 5 percent of net flows. FDI investment has not been sought aggressively by African countries as a source of financing, technology transfer, managerial skills, or market penetration. The inflows have been modest by comparison with other developing regions, and concentrated in a few key sectors such as oil and mining, and in a few countries, notably Nigeria, Gabon, and Kenya. The potential for attracting larger flows of direct investment remains unexploited, but the preconditions, political stability, good economic policies, good governance, adequate human resources and physical infrastructure, are, with few exceptions, largely lacking. The competition for FDI has become fierce, particularly with the entry of the East European countries in this field. Unlike many African countries, a number of East Asian countries fulfill most of the preconditions required by foreign investors. On one side
of the spectrum a few of the Sub-Saharan African countries, such as Nigeria, Cote d'Ivoire, Cameroon, Kenya, and Zimbabwe, have to focus their efforts on changing their policies and improving the enabling environment to host foreign investors. Others, particularly the Sahelian countries, will continue to rely heavily in official grants and concessional flows and should not count on large FDI inflows.
53. The same is true of flight capital reflows. The variability in estimates of flight capital from residents of Africa is more pronunced that those for Latin America. But some recent studies (19) suggest that at least $20-30 billion are held in deposits abroad, mostly by Nigerian residents. Thus the availability of this source of financing is of very limited consequence in the context of severely indebted low income countries other than Nigeria. To the extent that Nigeria can attract some of these flows back, the pressure on ODA flows will be eased somewhat. But the prospects, at least in the short run, do not appear very promising unless economic stability and investor confindence are restored.
An Assessment of the Policy Response
54. In assessing the financing requirements for growth, we identified a potential difference of about $6 billion between the ability of Sub-Saharan African countries to service debt and scheduled debt service payments. Low-income countries, excluding Nigeria, account for about $5 billion of the difference. (See Table 14.) ODA debt cancellation promised but not yet effected will erduce the difference by, at most, $400 million. Toronto-term reschedulings, if applied to all eligible bilateral official debt of rescheduling countries, would reduce scheduled debt service by about $2.3 billion. The remaining difference would be about $2 billion. Officially supported debt and debt service reduction operations could significantly reduce the $1 billion debt service due to commercial banks on long-term loans to severely indebted low-income African countries but would leave a large gap between scheduled debt service and our estimate of resources available for debt service. That difference implies that the policy respons
e to date, if fully implemented, is not adequate to restore external viability to many low-income African countries. The problem is worse in the second half of the decade. The concessional options of Toronto term reschedulings have relatively short grace periods. The principal payments due under these reschedulings add to scheduled debt service payments afted 1995. This bulge in debt service, while in the future, affects current assessments of external viability when it is recognized as too large to be met from available external resources.
55. At the September meeting in Trinidad of the Commonwealth Secretariat, then Chancellor of the Exchequer, John Major, proposed a more concessional approach to Paris Club reschedulings of the bilateral official debt of low-income countries. he proposed that Paris Club creditors cancel two thirds of the entire stock of eligible debt and reschedule the remainder over 25 years with 5 years of grace. Under his plan, interest due during the first five years after the rescheduling would be automatically capitalized, providing further cash-flow relief; later payments would be graduated and related to the debtor country's ability to pay. Bilateral creditors have undertaken discussions of the proposal and other concessional options at the Paris Club but have not yet announced a decision.
56. If these "Trinidad terms" were adopted and applied immediately to the entire stock of eigible bilateral official debt of rescheduling countries as an alternative to the Toronto terms, the scheduled debt service of low-income African countries would fall by $4 billion. The Trinidad terms would come close to restoring external viability to low-income Africa. This result must be qualified. First it does not differentiate among debtor countries. A few countries do not yet have adjustment programs and could not benefit from debt reduction. Others have debt servicing difficulties that are greater than the average for low-income Africa. If two-thirds debt reduction had been applied in past reschedulings (with no change in grace periods), eight low-income African countries would have faced devt service ratios above 50 percent in 1989 (20). Second, the analysis assumes that creditor funding of debt forgiveness and concessional rescheduling does not affect the availability of ODA. If donors were to allocate funds
from aid budgets for concessional reschedulings and reduce new allocations for other purposes, the impact of debt relief on external viability would be neutralized.
57. Nigeria and two of the middle.income severely indebted countries in Africa, Congo and Cote d'Ivoire, account for much of the remaining $1 billion difference between scheduled debt service and likely ability to service debt. All three are oil exporter; their need for debt relied will depend on evolution of oil prices. All could benefit from officially supported commercial bank debt and debt service reductions. Currently, these countries are not eligible for concessional relief on their bilateral official debt, mainly hard-term export credits. Unless oil prices rise significantly, some degree of concessional relief on their official bilateral debt (assuming strong demonstrations of commitment to adjustment programs) may be necessary to restore external viability.
IV. Conclusion
58. Debt difficulties are a symptom of a desper development problem in Africa. Structural problems, combined with poor economic policies are at the root. Countries that are undertaking structural adjustment and bringing about a turnaraound in the economic policies deserve conditional assistance from the international community. The momentum of growth in levels of real aid flows to Africa generated in the past few years will have to be maintained during the 1990s. Even allowing for exceptional efforts to raise domestic savings, adequate funding for low-income African countries' adjustment programs would rewuire continued expansion in the real value of ODA flows during the 1990s. One aspect of this aid effort should be the continuation and expansion of the SPA for low-income debt distressed countries in Africa. It would also be desirable to reinforce the SPA by extending coverage to lower middle-income countries that adopt adjustment programs.
59. There is also a need for additional concessionality in debt relief for low-income countries if Sub-Saharan African countries are to achieve external viability in the 1990s. For most countries, external viability could be achieved if scheduled debt service payments were, at a maximum, no greater than actual payments in recent years (25-30 percent of exports of goods and services). Achieving this goal in the most severely indebted low-income African countries will require more comprehensibe and more concessional reschedulings by these countries' main creditors -- official bilateral agencies. Ideally, the reduction in the present value of non-concessional bilateral loans through reschedulings should equal the grant element in new loans and grants extended to these debtors by the same creditor governments. Since these terms are considered appropriate for new credits to low-income debtor countries, they would be equally appropriate for rescheduled debt. While additional concessional assistance could, as well,
help debtor countries achieve external viability, there are two arguments in favor of concessional debt relief fits better with equitable burden sharing amoong creditors and donors. Second, the future availability of extra concessional assistance flows for debt service would always be in doubt.
60. The multilateral institutions should continue to increase net flows on concessional terms to support adjustment and development efforts, leverage other types of assistance, provide funds for buying back commercial debt and refinance interest payments on their own non-concessional loans on easy terms.
61. Private creditors are most exposed in Nigeria where a combination of a Brady-type deal, debt-equity swap and other reschedulings would ease the debt servicing problem. In other countries, the IDA debt reduction facility, along with other donors, could finance the buyback of commercial bank debt at deep discount and thus reach a comprehensibe settlement.
62. Borrowing country policies will play an important role in attracting foreign direct investment flows and in the repatriation of flight capital. These sources of financing have been neglected in Africa so far but potentially have a useful role to play in Nigeria and a few other countries. Many of the poorer and less diversified economies will likely continue to rely on official development assistance for the major share of their external financing needs. This differentiated approach to capital flows -- matching the appropriate type of financing with the right sub-group of countries -- is the key factor for bringing about an efficient allocation of limited external resources likely to be available for Africa and for their effective utilization by recipient countries. The scramble for limited amounts of concessional official development finance among every low-income country will result in a zero sum game.
References
Acquah, Paul, and Michael Edo. "Role of the IMF in Africa", mimeo., IMF, Exchange and Trade Relations Department, 1990.
Carey, Richard, "Prospects for Bilateral Concessional Assistance", mimeo., OECD, Development Cooperation Directorate, 1990.
Claessens, Stijn. "The Debt Laffer Curve: Some Estimates", mimeo., Debt and International Finance Division, July 1988.
-----, and Ishac Diwan. "Conditionality and Debt Relief", PRE Working Paper No. 213, June 1989.
Cohen, Daniel. "Is the Discount on the Secondary Market a Case for LDC Debt Relief", PRE Working Paper No. 132, November 1988.
Culagovski, Jorge, Victor Gabor, Maria-Cristina Germany, and Charles Humphreys. "Africa's Financing Needs for the 1990s", mimeo., Africa Regional Technical Department, Economics and Finance Division, 1990.
Chang, P. H. Kevin, and Robert Cumby. "Capital Flight in Sub-Saharan African Countries", mimeo., New York University, Stern School of Business, 1990.
Greens, Joshua. "The External Debt Problem of Sub-Saharan Africa", International Monetary Fund Staff Papers, 1989.
Krumm, Kathy. The Esternal Debt of Sub-Saharan Africa: Origins, Magnitude, and Implications for Action, World Bank Staff Working Paper No. 741, 1985.
World Bank. Sub-Saharan Africa: From Crisis to Sustainable Growth, 1989a.
-----. World Bank Atlas, 1990a.
-----. World Debt Tables, Vol. 1, 1989,90 edition, 1989b, and 1990-91 edition, 1990b.
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Table 1
Sub-Saharan Africa's External Debt
End-1989
(U.S. dollars, billions)
Total External Debt 161
Total Debt Service (20) 11
Debt/GNP (percent) 112
Debt/Exports (percent) 352
Debt Service
/Export (percent) 24
Memo items:
Latin American
Debt/GNP (percent) 48
Latin American
Debt/Exports (percent) 261
Latin American
Service/Exports (percent) 27
Source: World Bank, World Debt Tables, 1990-91 edition.
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------------------------------------------------------------------
Table 2
Indicators of structural Differences between Severely Indebted Low-Income Countries (SILICs) and Severely Indebted Middle-Income Countries (SIMICs)
(percent unless otherwise indicated)
SILICs SIMICs
Indicator:
Annual population growth 3.2 2.0
GNP per capita (World Bank Atlas) (U.S. $, 1988) 288 1,632
Gross domestic investment/GDP (cur. prices, 1987-88) 14 22
Exports as a share of GDP (1987-88) 18 16
Share of manufacturing in exports (1987-88) 8 43
Infant mortality (deaths per 1000 live births, 1987) 110 55
Primary school enrollment (1986, perc. of age group) 67 103
Official development assistance, share of GDP, 1987 8.2 0.6
Long-term official debt as a share of total debt, 1989 67 35
Source. World Bank data.
------------------------------------------------------------------
------------------------------------------------------------------
Table 3:
Structure of Scheduled Debt Service on Sub-Saharan Africa's Long-Term Debt in 1989. 1/
(percent share unless otherwise noted)
OFFICIAL
-------- Multilateral ---------
Total
Country IBRD/ Multi-
IDA Other lateral
Total Sub Saharan Africa 9.2 5.7 14.8
less Nigeria 10.0 8.4 18.4
Cos. with Mainly Official Debt 10.2 10.3 20.5
Cos. with Large Multilat. Debt 31.3 31.3 62.6
Botswana 36.9 29.8 66.7
Cape Verde 0.9 54.2 55.1
Swaziland 28.5 27.6 56.1
Cos. with Large Bilateral Debt 7.2 8.7 15.9
Cameroon 15.3 8.3 23.5
CAR 4.5 22.9 27.1
Equatorial Guinea 1.4 14.0 15.4
Ethiopia 6.6 3.0 9.6
Gabon 0.7 4.7 5.4
Guinea 7.6 6.6 14.1
Guinea-Bissau 2.8 21.5 24.3
Lesotho 5.0 38.2 43.3
Madagascar 3.0 5.4 8.4
Mauritania 8.0 24.6 32.6
Mozambique 0.2 3.0 3.2
Niger 3.1 14.4 17.4
Sao Tome & Principe 0.7 20.9 21.6
Senegal 4.9 17.2 22.1
Sierra Leone 6.9 10.7 17.5
Somalia 3.8 17.1 20.9
Tanzania 24.3 6.7 31.0
Togo 5.2 21.7 26.9
Uganda 8.3 18.1 26.4
Zaire 3.1 4.1 7.2
Zambia 17.6 11.1 28.7
Mixed Official Borrowers 20.5 14.7 35.2
Benin 2.9 18.0 20.9
Burkina Faso 4.6 37.0 41.6
Burundi 6.4 32.2 38.8
Chad 20.8 21.6 42.4
Comoros 2.4 29.9 32.3
Djibouti 0.9 24.9 25.8
Gambia, The 4.3 34.9 39.2
Ghana 12.1 14.2 26.3
Kenya 28.3 6.9 35.2
Liberia 25.4 17.5 42.9
Malawi 28.3 17.8 46.1
Mali 10.8 32.1 42.7
Mauritius 31.9 11.9 43.9
Rwanda 11.4 19.6 31.0
Mixed Private/Official Borrowers 8.3 2.2 10.5
Congo 2.1 4.9 7.1
Cote d'Ivoire 16.8 3.9 20.7
Nigeria 7.6 0.4 8.0
Seychelles 3.3 13.2 16.6
Sudan 2.4 6.0 8.4
Zimbabwe 14.0 4.5 18.5
OFFICIAL
---------- Bilateral 2/ -----------
Total
Country Paris Bila-
Club OPEC 3/ CMEA Other teral
Total Sub Saharan Africa 41.0 3.2 6.4 1.9 52.5
less Nigeria 40.7 4.9 6.3 2.6 54.5
Cos. with Mainly Official Debt 44.6 5.5 8.9 3.5 62.4
Cos. with Large Multilat. Debt 29.2 3.4 1.0 .0 33.4
Botswana 27.4 14.5 0.0 0.0 31.9
Cape Verde 25.2 6.5 11.2 0.0 42.1
Swaziland 34.1 0.0 0.0 0.0 34.1
Cos. with Large Bilateral Debt 47.6 5.8 11.1 3.7 68.2
Cameroon 46.1 1.7 0.0 3.2 51.1
CAR 37.4 4.5 1.4 17.9 61.2
Equatorial Guinea 48.3 0.0 4.9 28.7 81.8
Ethiopia 34.2 1.0 29.0 6.4 70.7
Gabon 64.7 0.9 0.0 0.1 65.7
Guinea 30.7 5.2 31.9 10.6 78.4
Guinea-Bissau 34.5 8.3 0.9 10.8 54.5
Lesotho 50.4 3.4 0.0 0.8 54.6
Madagascar 46.5 10.5 21.3 0.2 78.5
Mauritania 28.3 29.1 0.0 0.1 57.5
Mozambique 32.0 3.6 50.7 1.3 87.6
Niger 42.0 5.4 0.0 4.0 51.4
Sao Tome & Principe 44.0 0.0 9.7 12.7 66.4
Senegal 44.3 14.2 0.1 1.0 59.6
Sierra Leone 61.4 0.0 0.0 11.1 72.3
Somalia 46.1 22.5 5.4 4.5 78.4
Tanzania 27.2 12.9 14.7 6.4 61.2
Togo 48.1 3.8 0.0 0.0 52.0
Uganda 14.7 2.4 8.3 33.5 59.0
Zaire 71.3 1.3 0.0 1.7 74.4
Zambia 48.2 3.4 14.4 2.7 68.6
Mixed Official Borrowers 34.2 4.3 0.9 2.7 42.0
Benin 39.7 1.6 2.9 2.0 46.3
Burkina Faso 31.3 4.7 0.0 6.2 42.1
Burundi 22.3 10.1 2.8 6.0 41.2
Chad 29.6 4.0 0.0 0.0 33.6
Comoros 8.5 19.5 0.0 4.9 32.3
Djibouti 12.2 27.2 0.0 0.0 39.4
Gambia, The 23.4 14.4 0.0 0.0 37.8
Ghana 37.4 2.4 3.4 3.1 46.3
Kenya 35.8 2.5 0.0 2.5 40.9
Liberia 39.6 2.0 0.0 1.0 42.7
Malawi 36.0 0.0 0.0 1.2 37.2
Mali 8.8 29.0 2.0 2.0 41.9
Mauritius 35.4 2.3 0.0 5.1 42.8
Rwanda 30.4 7.9 0.0 2.6 40.9
Mixed Private/Official Borrowers 38.2 1.5 4.4 0.7 44.9
Congo 35.8 1.0 3.5 2.7 43.1
Cote d'Ivoire 33.7 0.0 0.0 0.1 33.8
Nigeria 41.5 0.0 6.5 0.6 48.6
Seychelles 16.6 7.0 0.0 1.7 25.5
Sudan 28.3 15.2 1.6 1.1 46.3
Zimbabwe 38.0 0.9 0.0 0.1 39.0
OFFICIAL
Country Total
Official
Total Sub Saharan Africa 67.3
less Nigeria 72.9
Cos. with Mainly Official Debt 82.9
Cos. with Large Multilat. Debt 96.0
Botswana 98.6
Cape Verde 97.2
Swaziland 90.1
Cos. with Large Bilateral Debt 84.1
Cameroon 74.7
CAR 88.3
Equatorial Guinea 97.2
Ethiopia 80.3
Gabon 71.1
Guinea 92.5
Guinea-Bissau 78.8
Lesotho 97.5
Madagascar 86.9
Mauritania 90.1
Mozambique 90.8
Niger 68.8
Sao Tome & Principe 88.1
Senegal 81.8
Sierra Leone 89.8
Somalia 99.3
Tanzania 92.2
Togo 78.8
Uganda 85.3
Zaire 81.6
Zambia 97.3
Mixed Official Borrowers 77.2
Benin 67.2
Burkina Faso 83.7
Burundi 80.0
Chad 76.0
Comoros 64.6
Djibouti 65.3
Gambia, The 77.0
Ghana 72.6
Kenya 76.0
Liberia 85.6
Malawi 83.1
Mali 84.7
Mauritius 86.7
Rwanda 71.9
Mixed Private/Official Borrowers 55.4
Congo 50.2
Cote d'Ivoire 54.5
Nigeria 56.6
Seychelles 42.1
Sudan 54.6
Zimbabwe 57.5
PRIVATE
Commer- Total
Country cial
Bank 4/ Other Private
Total Sub Saharan Africa 29.5 3.2 32.7
less Nigeria 26.6 0.5 27.1
Cos. with Mainly Official Debt 17.0 .0 17.1
Cos. with Large Multilat. Debt 4.0 .0 4.0
Botswana 1.4 0.0 1.4
Cape Verde 2.8 0.0 2.8
Swaziland 9.9 0.0 9.9
Cos. with Large Bilateral Debt 15.8 0.1 15.9
Cameroon 25.3 0.0 25.3
CAR 11.7 0.0 11.7
Equatorial Guinea 2.8 0.0 2.8
Ethiopia 18.8 0.9 19.7
Gabon 28.9 0.0 28.9
Guinea 7.5 0.0 7.5
Guinea-Bissau 21.2 0.0 21.2
Lesotho 2.1 0.0 2.1
Madagascar 13.1 0.0 13.1
Mauritania 9.9 0.0 9.9
Mozambique 9.2 0.0 9.2
Niger 31.1 0.0 31.1
Sao Tome & Principe 11.9 0.0 11.9
Senegal 18.3 0.0 18.3
Sierra Leone 10.2 0.0 10.2
Somalia 0.7 0.0 0.7
Tanzania 7.8 0.0 7.8
Togo 21.2 0.0 21.2
Uganda 14.5 0.2 14.7
Zaire 18.3 0.0 18.3
Zambia 2.7 0.0 2.7
Mixed Official Borrowers 22.8 0.0 22.8
Benin 32.8 0.0 32.8
Burkina Faso 16.2 0.0 16.2
Burundi 20.0 0.0 20.0
Chad 24.0 0.0 24.0
Comoros 35.4 0.0 35.4
Djibouti 34.7 0.0 34.7
Gambia, The 23.0 0.0 23.0
Ghana 27.5 0.0 27.5
Kenya 24.0 0.0 24.0
Liberia 14.4 0.0 14.4
Malawi 16.7 0.0 16.7
Mali 15.3 0.0 15.3
Mauritius 13.3 0.0 13.3
Rwanda 28.1 0.0 28.1
Mixed Private/Official Borrowers 38.9 5.6 44.6
Congo 49.8 0.0 49.8
Cote d'Ivoire 45.4 0.1 45.5
Nigeria 35.0 8.4 43.4
Seychelles 58.3 0.0 58.3
Sudan 45.4 0.0 45.4
Zimbabwe 30.1 12.4 42.5
TOTAL
All types of which
of
Country Creditors Conces- Noncon-
(US$, mil.) sional essional
Total Sub Saharan Africa 17,615 14.4 85.6
less Nigeria 11,588 21.1 78.9
Cos. with Mainly Official Debt 7,595 26.5 73.5
Cos. with Large Multilat. Debt 122 18.7 81.4
Botswana 76 12.9 87.2
Cape Verde 11 58.9 41.1
Swaziland 36 18.9 81.1
Cos. with Large Bilateral Debt 5,954 26.4 73.6
Cameroon 585 14.1 85.9
CAR 36 41.9 58.4
Equatorial Guinea 14 39.9 60.1
Ethiopia 327 43.0 56.9
Gabon 491 4.7 95.3
Guinea 224 56.9 43.1
Guinea-Bissau 33 29.8 70.2
Lesotho 24 25.6 74.4
Madagascar 429 18.0 82.0
Mauritania 208 42.7 57.3
Mozambique 511 62.8 37.2
Niger 144 20.6 79.4
Sao Tome & Principe 13 31.3 68.7
Senegal 499 24.7 75.3
Sierra Leone 42 34.1 65.9
Somalia 114 50.4 49.6
Tanzania 327 44.3 55.7
Togo 76 30.8 69.2
Uganda 172 31.8 68.2
Zaire 1,164 11.6 88.4
Zambia 522 16.9 83.1
Mixed Official Borrowers 1,520 27.5 72.5
Benin 89 25.5 74.5
Burkina Faso 68 46.4 53.5
Burundi 47 56.9 43.1
Chad 13 53.6 46.4
Comoros 16 54.9 45.1
Djibouti 21 63.4 37.1
Gambia, The 21 50.2 49.3
Ghana 241 27.2 72.8
Kenya 616 15.7 84.3
Liberia 124 27.3 72.7
Malawi 78 26.1 73.7
Mali 49 70.8 29.4
Mauritius 102 24.9 75.1
Rwanda 34 57.6 42.4
Mixed Private/Official Borrowers 10,020 5.3 94.7
Congo 979 7.9 92.1
Cote d'Ivoire 1,629 5.4 94.6
Nigeria 6,027 1.5 98.5
Seychelles 30 17.5 82.5
Sudan 908 25.7 74.3
Zimbabwe 447 6.9 93.2
1. Shares are based on a total excluding the IMF.
2. Includes estimates of guaranteed obligations.
3. OPEC includes: Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela.
4. Bank data include commercial bank loans to private nonguaranteed borrowers.
------------------------------------------------------------------
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Table 4:
African Oil Exporters 1/: Debt Stock and Debt Service 2/
------------------------------------------------------------------
($US millions)
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
------------------ ------- ------ ------ ---------- ----------
TOTAL 916 14,355 43,926 8,081 2,684
Official 756 4,827 29,450 4,954 1,158
Multilateral 263 1,150 5,035 716 628
IBRD/IDA 253 932 4,033 571 518
Other 10 218 1,002 145 110
Bilateral 493 3,677 24,415 4,238 530
Paris Club 454 2,880 21,769 3,438 434
Oil Exporters 0 155 190 24 4
CMEA 4 173 1,665 428 11
Other 35 469 791 348 81
Private 160 9,528 14,476 3,127 1,526
Commercial Banks 3/ 142 9,526 9,923 2,887 1,292
Other 18 2 4,553 240 234
------------------------------------------------------------------
Memo Item: IMF 0 96 260 18
Percent Shares
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
-------------------- ------- ------ ------ ---------- --------
TOTAL 100.0 100.0 100.0 100.0 100.0
Official 82.5 33.6 67.0 61.3 43.1
Multilateral 28.7 8.0 11.5 8.9 23.4
IBRD/IDA 27.6 6.5 9.2 7.1 19.3
Other 1.1 1.5 2.3 1.8 4.1
Bilateral 53.8 25.6 55.6 52.4 19.7
Paris Club 49.6 20.1 49.6 42.5 16.2
Oil Exporters 0.0 1.1 0.4 0.3 0.1
CMEA 0.4 1.2 3.8 5.3 0.4
Other 3.8 3.3 1.8 4.3 3.0
Private 17.5 66.4 33.0 38.7 56.9
Commercial Banks 3/ 15.5 66.4 22.6 35.7 48.1
Other 2.0 0.0 10.4 3.0 8.7
------------------------------------------------------------------
1/ Oil exporters include Cameroon, Congo, Gabon, and nigeria. Data for Angola are not available.
2/ Excludes interest arrears on long-term debt; debt service on long-term debt only.
3/ Includes short-term and non-guaranteed long-term debt.
4/ Excluding IMF.
Note: Small differences between scheduled and cash debt service payments are the result of interest and exchange rate movements and schedule adjustments. Large differences imply arrears and reschedulings.
------------------------------------------------------------------
Table 5:
African Mineral Exporters 1/: Debt Stock and Debt Service 2/
------------------------------------------------------------------
($US millions)
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
------------------ ------- ------ ------ ---------- ----------
TOTAL 1,510 9,414 17,778 2,153 451
Official 1,127 6,804 14,812 1,885 412
Multilateral 106 1,136 4,232 378 165
IBRD/IDA 106 882 2,588 208 74
Other 0 254 1,644 170 91
Bilateral 1,021 5,668 10,580 1,507 247
Paris Club 741 4,129 7,964 1,247 154
Oil Exporters 6 266 421 51 26
CMEA 170 499 885 146 40
Other 104 774 1,310 63 27
Private 383 2,610 2,966 268 39
Commercial Banks 3/ 34 2,598 2,962 268 38
Other 349 12 4 0 1
------------------------------------------------------------------
Memo Item: IMF 0 1,004 1,993 425
Percent Shares
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
-------------------- ------- ------ ------ ---------- --------
TOTAL 100.0 100.0 100.0 100.0 100.0
Official 74.6 72.3 83.3 87.6 91.4
Multilateral 7.0 12.1 23.8 17.6 36.6
IBRD/IDA 7.0 9.4 14.6 9.7 16.4
Other 0.0 2.7 9.2 7.9 20.2
Bilateral 67.6 60.2 59.5 70.0 54.8
Paris Club 49.1 43.9 44.8 57.9 34.1
Oil Exporters 0.4 2.8 2.4 2.4 5.8
CMEA 11.3 5.3 5.0 6.8 8.9
Other 6.9 8.2 7.4 2.9 6.0
Private 25.4 27.7 16.7 12.4 8.6
Commercial Banks 3/ 2.3 27.6 16.7 12.4 8.4
Other 23.1 0.1 0.0 0.0 0.2
------------------------------------------------------------------
1/ Mineral exporters include Botswana, Guinea, Liberia, Sierra Leone, Zaire, and Zambia.
2/ Excludes interest arrears on long-term debt; debt service on long-term debt only.
3/ Includes short-term and non-guaranteed long-term debt.
4/ Excluding IMF.
Note: Small differences between scheduled and cash debt service payments are normally the result of interest and exchange rate movements and schedule adjustments. Large differences imply arrears and reschedulings.
------------------------------------------------------------------
Table 6:
African Agricoltural Exporters 1/: Debt Stock and Debt Service 2/
------------------------------------------------------------------
($US millions)
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
------------------ ------- ------ ------ ---------- ----------
TOTAL 1,586 15,427 33,196 3,354 1,705
Official 1,379 10,602 22,285 2,072 756
Multilateral 245 2,271 8,562 660 505
IBRD/IDA 235 1,406 6,388 440 384
Other 10 865 2,174 220 121
Bilateral 1,134 8,331 13,723 1,412 251
Paris Club 896 4,527 8,663 1,038 122
Oil Exporters 66 1,711 2,867 190 9
CMEA 94 612 742 85 15
Other 78 1,481 1,451 99 105
Private 207 4,825 10,911 1,282 949
Commercial Banks 3/ 105 4,795 10,890 1,281 948
Other 102 30 21 1 1
------------------------------------------------------------------
Memo Item: IMF 0 941 2,445 578
Percent Shares
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
-------------------- ------- ------ ------ ---------- --------
TOTAL 100.0 100.0 100.0 100.0 100.0
Official 86.9 68.7 67.1 61.8 44.3
Multilateral 15.4 14.7 25.8 19.7 29.6
IBRD/IDA 14.8 9.1 19.2 13.1 22.5
Other 0.6 5.6 6.5 6.6 7.1
Bilateral 71.5 54.0 41.3 42.1 14.7
Paris Club 56.5 29.3 26.1 30.9 7.2
Oil Exporters 4.2 11.1 8.6 5.7 0.5
CMEA 5.9 4.0 2.2 2.5 0.9
Other 4.9 9.6 4.4 3.0 6.2
Private 13.1 31.3 32.9 38.2 55.7
Commercial Banks 3/ 6.6 31.1 32.8 38.2 55.6
Other 6.4 0.2 0.1 0.0 0.1
------------------------------------------------------------------
1/ Agricoltural exporters include Cote d'Ivoire, Ghana, Malawi, Sudan, Tanzania, Uganda.
2/ Excludes interest arrears on long-term debt; debt service on long-term debt only.
3/ Includes short-term and non-guaranteed long-term debt.
4/ Excluding IMF.
Note: Small differences between scheduled and cash debt service payments are normally the result of interest and exchange rate movements and schedule adjustments. Large differences imply arrears and reschedulings.
------------------------------------------------------------------
Table 7:
African Diversified Exporters 1/: Debt Stock and Debt Service 2/
------------------------------------------------------------------
($US millions)
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
------------------ ------- ------ ------ ---------- ----------
TOTAL 704 4,624 9,326 1,201 1,044
Official 374 2,291 6,658 846 692
Multilateral 93 793 3,156 364 319
IBRD/IDA 92 612 2,452 279 259
Other 1 181 704 85 60
Bilateral 281 1,498 3,502 482 373
Paris Club 281 1,464 3,219 439 344
Oil Exporters 0 0 113 22 10
CMEA 0 0 0 0 0
Other 0 34 170 21 19
Private 330 2,333 2,668 355 352
Commercial Banks 3/ 105 1,731 2,347 299 269
Other 225 602 321 56 83
------------------------------------------------------------------
Memo Item: IMF 0 361 508 252
Percent Shares
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
-------------------- ------- ------ ------ ---------- --------
TOTAL 100.0 100.0 100.0 100.0 100.0
Official 53.1 49.5 71.4 70.4 66.3
Multilateral 13.2 17.1 33.8 30.3 30.6
IBRD/IDA 13.1 13.2 26.3 23.2 24.8
Other 0.1 3.9 7.5 7.1 5.7
Bilateral 39.9 32.4 37.6 40.1 35.7
Paris Club 39.9 31.7 34.5 36.6 33.0
Oil Exporters 0.0 0.0 1.2 1.8 1.0
CMEA 0.0 0.0 0.0 0.0 0.0
Other 0.0 0.7 1.8 1.7 1.8
Private 46.9 50.5 28.6 29.6 33.7
Commercial Banks 3/ 14.9 37.4 25.2 24.9 25.8
Other 32.0 13.0 3.4 4.7 8.0
------------------------------------------------------------------
1/ Diversiefied economies include Kenya, Mauritius, Swaziland, and Zimbabwe.
2/ Excludes interest arrears on long-term debt; debt service on long-term debt only.
3/ Includes short-term and non-guaranteed long-term debt.
4/ Excluding IMF.
Note: Small differences between scheduled and cash debt service payments are normally the result of interest and exchange rate movements and schedule adjustments. Large differences imply arrears and reschedulings.
------------------------------------------------------------------
Table 8:
African Sahel Countries 1/: Debt Stock and Debt Service 2/
------------------------------------------------------------------
($US millions)
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
------------------ ------- ------ ------ ---------- ----------
TOTAL 487 4,278 10,635 1,002 583
Official 455 3,199 9,565 819 418
Multilateral 30 960 4,036 266 197
IBRD/IDA 26 510 2,194 58 55
Other 4 450 1,842 208 142
Bilateral 425 2,239 5,529 553 221
Paris Club 235 1,295 3,138 374 147
Oil Exporters 17 469 1,570 160 69
CMEA 80 193 379 2 1
Other 93 282 442 17 4
Private 32 1,079 1,070 183 165
Commercial Banks 3/ 32 1,065 1,070 183 165
Other 0 14 0 0 0
------------------------------------------------------------------
Memo Item: IMF 0 301 586 155
Percent Shares
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
-------------------- ------- ------ ------ ---------- --------
TOTAL 100.0 100.0 100.0 100.0 100.0
Official 93.4 74.8 89.9 81.7 71.7
Multilateral 6.2 22.4 38.0 26.5 33.8
IBRD/IDA 5.3 11.9 20.6 5.8 9.4
Other 0.8 10.5 17.3 20.8 24.4
Bilateral 87.3 52.3 52.0 55.2 37.9
Paris Club 48.3 30.3 29.5 37.3 25.2
Oil Exporters 3.5 11.0 14.8 16.0 11.8
CMEA 16.4 4.5 3.6 0.2 0.2
Other 19.1 6.6 4.2 1.7 0.7
Private 6.6 25.2 10.1 18.3 28.3
Commercial Banks 3/ 6.6 24.9 10.1 18.3 28.3
Other 0.0 0.3 0.0 0.0 0.0
------------------------------------------------------------------
1/ Sahelian countries include Burkina, Chad, The Gambia, Mali, Mauritania, Niger, and Senegal.
2/ Excludes interest arrears on long-term debt; debt service on long-term debt only.
3/ Includes short-term and non-guaranteed long-term debt.
4/ Excluding IMF.
Note: Small differences between scheduled and cash debt service payments are normally the result of interest and exchange rate movements and schedule adjustments. Large differences imply arrears and reschedulings.
------------------------------------------------------------------
Table 9:
Small African Economies 1/: Debt Stock and Debt Service 2/
------------------------------------------------------------------
($US millions)
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
------------------ ------- ------ ------ ---------- ----------
TOTAL 17 458 1,725 163 85
Official 17 364 1,577 122 60
Multilateral 4 126 875 45 31
IBRD/IDA 4 33 345 4 4
Other 0 93 530 41 27
Bilateral 13 238 702 77 29
Paris Club 13 120 384 48 20
Oil Exporters 0 31 144 15 8
CMEA 0 31 73 3 0
Other 0 56 101 11 1
Private 0 94 148 41 25
Commercial Banks 3/ 0 94 148 41 25
Other 0 0 0 0 0
------------------------------------------------------------------
Memo Item: IMF 0 24 25 7
Percent Shares
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
-------------------- ------- ------ ------ ---------- --------
TOTAL 100.0 100.0 100.0 100.0 100.0
Official 100.0 79.5 91.4 74.8 70.6
Multilateral 23.5 27.5 50.7 27.6 36.5
IBRD/IDA 23.5 7.2 20.0 2.5 4.7
Other 0.0 20.3 30.7 25.2 31.8
Bilateral 76.5 52.0 40.7 47.2 34.1
Paris Club 76.5 26.2 22.3 29.4 23.5
Oil Exporters 0.0 6.8 8.3 9.2 9.4
CMEA 0.0 6.8 4.2 1.8 0.0
Other 0.0 12.2 5.9 6.7 1.2
Private 0.0 20.5 8.6 25.2 29.4
Commercial Banks 3/ 0.0 20.5 8.6 25.2 29.4
Other 0.0 0.0 0.0 0.0 0.0
------------------------------------------------------------------
1/ Small economies include Cape Verde, Comoros, Djibouti, Equatorial Guinea, Guinea-Bissau, Lesotho, and Sao Tome and Principe.
2/ Excludes interest arrears on long-term debt; debt service on long-term debt only.
3/ Includes short-term and non-guaranteed long-term debt.
4/ Excluding IMF.
Note: Small differences between scheduled and cash debt service payments are normally the result of interest and exchange rate movements and schedule adjustments. Large differences imply arrears and reschedulings.
------------------------------------------------------------------
Table 10:
Other Least Developed African Countries 1/:
Debt Stock and Debt Service 2/
------------------------------------------------------------------
($US millions)
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
------------------ ------- ------ ------ ---------- ----------
TOTAL 448 4,389 16,791 1,661 671
Official 442 3,580 15,286 1,424 522
Multilateral 96 1,112 5,416 185 165
IBRD/IDA 95 751 3,404 55 59
Other 1 361 2,012 130 106
Bilateral 346 2,468 9,870 1,239 357
Paris Club 277 1,606 5,623 633 263
Oil Exporters 5 303 1,271 106 20
CMEA 53 249 2,469 455 62
Other 11 310 507 45 12
Private 6 809 1,505 237 149
Commercial Banks 3/ 6 809 1,501 234 146
Other 0 0 4 3 3
------------------------------------------------------------------
Memo Item: IMF 0 306 563 158
Percent Shares
---Debt Stock 4/--- -1989 Debt Service 4/-
Type of Creditor 1970 1980 1989 Scheduled Paid
-------------------- ------- ------ ------ ---------- --------
TOTAL 100.0 100.0 100.0 100.0 100.0
Official 98.7 81.6 91.0 85.7 77.8
Multilateral 21.4 25.3 32.3 11.1 24.6
IBRD/IDA 21.2 17.1 20.3 3.3 8.8
Other 0.2 8.2 12.0 7.8 15.8
Bilateral 77.2 56.2 58.8 74.6 53.2
Paris Club 61.8 36.6 33.5 38.1 39.2
Oil Exporters 1.1 6.9 7.6 6.4 3.0
CMEA 11.8 5.7 14.7 27.4 9.2
Other 2.5 7.1 3.0 2.7 1.8
Private 1.3 18.4 9.0 14.3 22.2
Commercial Banks 3/ 1.3 18.4 8.9 14.1 21.8
Other 0.0 0.0 0.0 0.2 0.4
------------------------------------------------------------------
1/ Other least developed economies include Benin, Burundi, CAR, Ethipia, Madagascar, Mozambique, Rwanda, Somalia, and Togo.
2/ Excludes interest arrears on long-term debt; debt service on long-term debt only.
3/ Includes short-term and non-guaranteed long-term debt.
4/ Excluding IMF.
Note: Small differences between scheduled and cash debt service payments are normally the result of interest and exchange rate movements and schedule adjustments. Large differences imply arrears and reschedulings.
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Table 11:
Sub-Saharan Africa -- 1989 Debt Service on Long-Term Debt
Scheduled Debt
Debt Service Paid/
Service Share Paid Share Scheduled
(US$, bil.) (percent) (US$, bil.) (percent) (percent)
Total 17.6 100.0 7.2 100.0 41.0
Official 11.9 67.3 4.0 55.2 33.7
Multilateral 2.6 14.8 2.0 27.8 77.0
Bilateral 9.2 52.5 2.0 27.4 21.4
Paris Club 7.2 41.0 1.5 20.5 20.6
OPEC 0.6 3.2 0.1 2.0 25.7
CMEA 1.1 6.4 0.1 1.8 11.5
Other 0.3 1.9 0.2 3.0 65.8
Private 5.8 32.7 3.2 44.8 56.1
Commer. Banks 5.2 29.5 2.9 39.9 55.6
Other 0.6 3.2 0.4 4.8 61.4
Source: World bank, Debtor Reporting System
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Table 12:
Cancellation of ODA Debt of Sub-Saharan Africa, 1978-89
(Millions of Dollars)
Donor Country 1978-86 1987-89 1990 Total
Belgium 0 184 0 184
Canada 176 53 730 959
Denmark 194 136 15 345
Finland 49 0 0 49
France 100 0 3,300 3,400
Germany 1,284 1,315 587 3,186
Italy 79 0 0 79
Japan 20 18 0 38
The Netherlands 144 58 0 202
Norway 4 7 0 11
Sweden 189 3 13 205
United Kingdom 175 68 0 243
United States 0 0 282 282
All Donors 2,414 1,842 4,927 9,183
Note: Data for some donor countries may contain non-ODA debt cancellation. For Japan, amounts represents grants provided to fund debt service payments. Not all of the announced cancellations have gained final approval from donor governments. Some donor governments provided mainly grants and had little or no ODA claims to cancel.
------------------------------------------------------------------
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Table 13
Toronto-Term Reschedulings Benefitting African Countries
Decrease
Lenght in present
of Value of
Amount Consol- Net Cash- Sched.
Date of Consol- idation Flow Debt
Resched. idated Period 1/ Savings /2 Service 3/
Debtor Country ($, mil.) (months) ($, mil.) ($, mil.)
Mali Oct.'88 63 16 * 4
Madagascar Oct.'88 197 21 2 25
Tanzania Dec.'88 481 6 6 96
Cent.Afric. Dec.'88 26 18 1 4
Republic
Niger Dec.'88 44 12 1 11
Senegal Jan.'89 142 14 3 28
Uganda Jan.'89 42 18 2 8
Guinea Apr.'89 116 12 * 5
Mauritania Jun.'89 110 12 2 15
Togo Jun.'89 76 14.5 1 15
Benin Jun.'89 157 13 * 12
Zaire Jun.'89 1,530 13 26 197
Chad /3 Oct.'89 40 15 * 4
Guinea-Bissau Oct.'89 26 15 * 4
Mali Nov.'89 16 26 * 1
Senegal Feb.'90 107 12 1 23
Equitorial Mar.'90 6 0 * 1
Guinea 3/
Tanzania Mar.'90 200 12 3 42
Mozambique Jun.'90 707 30 30 155
Cent.Afric. Jun.'90 4 12 * 1
Republic
Togo Jul.'90 84 12 3 16
Madagascar Jul.'90 139 12 2 20
Zambia Jul.'90 965 18 14 136
Niger Sep.'90 116 28 4 30
Total of average: 5,394 15.8 4/ 101 853
1/ The period over which debt service payments coming due are consolidated and subject to rescheduling. Payments falling due after the consolidation period are not rescheduled. The consolidation period normally starts at or slightly before the date of the rescheduling, often coinciding with a Fund program.
2/ Relative to the previous standard rescheduling for low-income countries, a 20-year maturity with 10 years of grace. A discount rate of 9 percent was used to calculate present values.
3/ Bilateral arrangements outside the Paris Club.
4/ Excluding the bilateral arrangements outside the Paris Club.
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Table 14
Low-Income African Countries
Effect of Debt Relief on Scheduled Debt Service
(U.S. $, billions)
Average Scheduled Debt Service 1991-95 8.2
Estimated Debt Service Capacity 3.5
Difference 4.7
Effect of ODA Debt Cancellation 0.4
Remaining Difference 4.3
(a) Toronto-term Rescheduling 2.3
Remaining Difference 2.0
(b) Trinidad-term Rescheduling 4.0
Remaining Difference 0.3
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