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London (pte030/10.06.2005/14:11) - Finance ministers from the world's richest countries will be meeting in London over the next two days to discuss the African debt-relief project. China, India, South Africa and Brazil have also been invited to a meeting with the G8, which comprises Britain, France, Germany, Italy, Japan, the U.S., Canada and Russia.
With the Gleneagles G8 summit http://www.g8.gov.uk only one month away, Prime Minister Tony Blair is eager to find common ground with the G8 group members.
"There is vigorous discussion taking place on how we're going to finance a debt deal," said Hilary Benn, Britain's international development minister at a conference. "The debate has been between those who want multilateral debt cancellation and are prepared to put the money in; those who want it but want it paid for out of existing resources, and those who aren't quite convinced," Benn added.
Sub-Saharan Africa has a total debt of about US$230 billion in external debt, paying about 12 billion per annum on servicing, which is mainly owed to the International Monetary Fund http://www.imf.org and the World Bank http://www.worldbank.org .
In talks that took place in Washington this week regarding the G8 summit and the African debt, President Bush and Prime Minister Blair agreed to fund the debt relief, provided that the countries needed to begin combating corruption.
Aid agencies say that the proposed number of countries (so far, 18) to be offered debt relief by the UK and the US falls well short of the 62 that need immediate financial assistance. The countries eligible for debt relief are: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.
However France, Japan and Germany have a proposal that would only cover five countries.
It is still not clear how the debt will be paid. British finance minister Brown has proposed an International Finance Facility, which he says could raise an extra 50 billion in funds by using future development budgets as collateral and issuing them in bonds.
The Bush administration has not been enthused by the idea.
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