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Nyerere's Daughter Leads Campaign For Debt Cancellation

Nyerere's Daughter Leads Campaign For Debt Cancellation
February 13, 2000

DAR ES SALAAM, Tanzania (PANA) - Rosemary, the daughter of Tanzania's late president Julius Nyerere, has assumed the mantle of her father by turning into a debt cancellation activist.

Like the late African statesmen, she has been drumming up support for the cancellation of massive debts crippling heavily indebted countries, most of which are in Africa.

In her latest appeal to countries of the G8, Rosemary said the West had a moral obligation to write off the debts, now totalling over 2.3 trillion US dollars.

Tanzania is one of the 41 countries of the world, classified as severely indebted, with an estimated debt stock amounting to eight billion US dollars, as at December last year.

There are prospects of the country beginning to enjoy debt relief under the much touted Heavily Indebted Poor Countries (HIPC) Initiative, but she has criticised the policy, saying the option would only plunge the continent into deeper poverty.

One of the conditions for debt relief makes it mandatory for governments hoping to qualify to restructure subsidy on social services in their countries.

"If the third world countries accept such conditions, how are the poor people to survive without subsidies?" She scoffed during last year's Johannesburg Summit for Debt Free Millennium.

The debt of third world countries has risen from 610 billion US dollars in 1980 to 2.3 trillion dollars in 1997 in spite of large repayments made by debtor countries every year.

First Lady Anna Mkapa has called for a complete write off of the debts in favour of nations that demonstrated a commitment to shape up their economies in line with poverty eradication.

But creditor nations have always maintained their debtors had a moral obligation to pay up, largely ignoring calls for a complete writing off of the monies.

The first seeds of the country's debts were sowed when the Government took over direct management of the economy and created parastatals to run the business.

Then the country borrowed heavily during the 1973/74 and 1979/80 oil crisis, a situation that triggered an inflation the world over.

Another factor was the war with Uganda's Idi Amin, which has been estimated to have cost the country more than 500 million US dollars.

Other factors include the breaking up of the former East African Community, which forced Tanzania to establish its own airline, railways, posts and telecommunication companies.

But what angers debt cancellation activists though is that some of the loans were used to start projects which made losses from their initial start.

Some of them remained as white elephants.

Oxfam, that supported the late Nyerere's debt cancellation initiative has concluded that the current trend of external debt payment will not enable Tanzania to achieve progress and that over 40 percent of Tanzania's population will remain extremely poor.

The organisation observed that on per capita basis, Tanzania was spending nine times as much on debt servicing as on basic health and four times as much on debt as on primary education.

Both the IMF and the World Bank agree that Tanzania's debt is hefty relative to its servicing capacity, but blames the government for past over borrowing to finance shoddy projects which did not correspond to economic growth.

Churches that have joined the debt cancellation campaign have raised a moral issue to be considered by the government.

They say it is not fair to pay debts when children are dying of malnutrition, lack education, clean water and health services.