The foreign debt of African nations has increased so rapidly in recent years that threats of bankruptcy hover across the continent, raising the prospect that Africa’s most serious crisis will be triggered not by drought, but by debt. The debt problem is not only slowing economic growth and increasing poverty; it is fomenting political upheaval by forcing these nations to neglect social and economic development in order to make debt payments. People in many countries are denied the most basic public services as their governments devote dwindling export earnings, their main source of income, to economic and political survival.
Famine is now the familiar signal of Africa’s misery, and the drought is a basic cause of the current emergency. But the foreign debt represents the long-term danger to the African countries’ economic viability because it blocks their return to steady economic growth and locks them into greater dependency on the outside world. Without a solution to the debt crisis, the African nations can neither gain the agricultural self-sufficiency that is needed immediately, nor dream of an economic takeoff even beyond the year 2000.
Latin America has emerged as the focal point of alarm over the debt problems of developing nations. Latin American debt is huge, mainly commercial, and concentrated among fewer countries; the aggregate debt of the 50 states belonging to the Organization of African Unity (OAU), by comparison, is exceeded by the combined debt of just two Latin American countries, Brazil and Mexico. It has been projected that default by Brazil alone would cost the United States a loss of $25 billion in gross national product and of 400,000 jobs, within a year.
But if the preponderance of Latin America’s indebtedness represents the international debt bomb, the fuse extends to Africa. Notwithstanding the smaller magnitude of African external debts as a whole, the debt of almost every African country is astronomical in relation to its export earnings. And nearly two decades of failed economic policies have rendered African societies more volatile