November 4, 2000
Debt campaigners have again highlighted the "hopelessly inadequate" debt relief being offered to the world's poorest countries, after it was revealed that Cameroon's annual debt service payments will be reduced by only 40% in the next five years. The highly impoverished West African country became the eleventh country to reach "decision point" in the Heavily Indebted Poor Countries initiative (HIPC) on 16th October. The deal for Cameroon, announced by the World Bank and IMF will see Cameroon continuing to pay on average $280 million per year over the next five years. Its projected average debt service payments exceed the amount Cameroon currently pays on education ($239 million) and health ($87 million).
The low levels of debt relief contrast starkly with the extremely high levels of poverty in Cameroon. A third of the country's children are malnourished and 60% of its entire population do not even have access to clean water. The United Nations recently ranked the indebted country 134 out of 174 on the Human Development Index. Only eleven countries (Benin, Bolivia, Burkina Faso, Cameroon, Honduras, Mauritania, Mali, Mozambique, Senegal, Tanzania and Uganda) have begun to receive relief under the enhanced Heavily Indebted Poor Countries (HIPC) initiative agreed in Cologne. These eleven have been promised debt relief of $10.4 billion [1], but as in the case of Cameroon this relief is spread thinly over the next 25 years.
Cameroon confirms the central criticism made of the HIPC initiative by Jubilee 2000 that it does not provide sufficient debt relief. The fact that it has taken ten months for eleven countries to receive debt relief also raises real concerns that the creditors will not meet their promises to secure debt relief for at least 20 countries by the end of this year. Ann Pettifor, Director of Jubilee 2000 UK said: "Once again, HIPC is proving itself to be hopelessly inadequate. Countries such as Cameroon urgently need their debts cancelled, yet they are offered only small reductions. The cut in annual debt service will help only marginally in poverty reduction, and the remaining annual payments will continue to be a severe drain on scarce government resources."
Cameroon - details of debt deal
The payments over the next five years are $312 million in 2000/2001, $226 million in 2001/2002, $242 million in 2002/2003, $291 million 2003/2004, $328 million in 2004/2005 and $347 million in 2005/2006. The total relief is about $2 billion, but it will be spread thinly over the next 20-25 years, and for the overall period the reduction is only 15 per cent (measured in net present value terms).
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