Debt crisis in Africa Essay Example | Topics and Well Written Essays - 2250 words

Debt crisis in Africa - Essay Example During the The First AU Conference of African Ministers of Economy and Finance (CAMEF) held on 7 May 2005 in Dakar, Senegal, one of the recommended issues was the Debt Cancellation. The ministers agreed that debt cancellations should be the ultimate goal for Africa. However, according to the author of the Conference report, they also require that Africa should link the debt cancellation with the Millennium Development Goals (MDGs), and the access of African products to foreign markets. Other recommendations during this Conference concerning debt cancellation were Africa’s domestic debt; debt cancellation should not result in reducing Official Development Assistance (ODA) to Africa; establishment of an African Debt Management Fund to facilitate all debt or cancellation mechanisms and initiatives, which is yet to be established; African countries should come together and propose a common position on debt cancellation; African Countries should carry out an audit indicating the am ount of debt, its origins and terms; African countries are responsible to ensure that Africa’s debt remains indivisible so that any initiative associated with African debt should benefit all African countries; and African leaders should avoid being subjected to conditionalities related to debt cancellation. However, the conclusion of the recommendations was that it has to be approved by the World Bank and the IMF. Never once the World Bank or the IMF prescriptions of economic policies reform was successful but vice versa. Countries affected by economic crisis are required to undergo structural arrangement and conditional arrangements by the World Bank and the Fund, but their prescriptions have proven failure not only in Africa but also in other developing countries. According to Dembell, their structural adjustment program has led to economic stagnation, fewer investments, more external dependence, and has weakened the state’s role in developing social and economic wel fare.