AID-DEBT RELIEF: For a song! - Denmark to write off €437 million to Africa

subscriber | 31 January, 2006

JOHANNESBURG. Denmark will write off € 427 million (DKR 3.4 billion) to Angola, Congo, Kenya, Liberia, Nigeria, Somalia, Sudan and Swaziland.

The promise was made to the Irish rock celebrity Bono during his visit to Copenhagen in January.
The current
debt cancellation falls under the G8, The Group of Eight, Gleneagles Summit decision to cancel debt to Africa at a meeting in Scotland in July last year.

Most of the money owed is export credits given for the importation of Danish goods, e.g. pumps.

The largest chunk of the debt is owed by Nigeria, € 322 000 (DKR 2,4 billion).

In the case of Congo, Kenya and Liberia there is also debt linked to a World Bank programme that Denmark also will write off.

The G8 announcement in July last year was that the 18 poorest countries in the world, most of them in Africa, would receive a € 31billion ($40 billion) debt relief package.

Africascan Comment
Debt cancellation activists, such as the North/South Coalition, argue that the Danish government uses these write-offs to maintain the aid budget levels (0.8 % of GDP).

Countries with a particularly high level of export credit linked debt to Denmark would stand to loose considerable amounts. It is less likely, though that e g Sudan, which owes € 269 million to Denmark, would see a corresponding cut in its aid from Denmark.