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| How NEPAD can engage with Poverty Reduction Strategies: Developing an appropriate framework |
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4. Debt
Debt hampers development and widens the gap between Africa and the developed world.
For most African countries (out of 41 heavily indebted poor countries 33 are in Africa), debt service consumes twice than health and education costs.
NEPAD should therefore have started with a call for debt cancellation and not more debt relief and ODA that leads to more indebtedness. It's immoral and scandalous for the North to speak and advocate for partnership when Africa is incapacitated with debts. Debts will continue to be Africa's stumbling block, the only way to have a fresh start was to let creditors and debtors assess debt sustainability and cancel all un-payable debt. The management of external debt in Africa should be a priority for Africa's development.
UNCTAD (2001) noted that for Africa to reduce a dependency future it needs an additional $10billion a year in official flows (aid) and highly concessional loans.
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