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1 (October 4, 2002)

handle is hein.crs/crsahzn0001 and id is 1 raw text is: Order Code RS21329 Updated October 4, 2002 CRS Report for Congress Received through the CRS Web African Debt to the United States and Multilateral Agencies Jonathan E. Sanford Specialist in International Political Economy Foreign Affairs, Defense, and Trade Division Summary The countries of sub-Saharan Africa are generally very poor, and the burden of servicing their foreign debt is often insurmountably heavy. On the average, African countries owe 46% of their foreign debt to official bilateral lenders, 32% to multilateral institutions, and 22% to private creditors. However, most of their debt payments (57%) go to private creditors, while multilateral creditors receive 21% and bilateral creditors 22% of the total. Little of the bilateral debt is owed to the United States. In recent years, multilateral agencies and bilateral creditors have forgiven substantial amounts of debt, in order to reduce the poor countries' debt burden to sustainable levels. However, debtors many still have difficulty servicing their debts. There have been calls for 100% forgiveness of multilateral debt. Many analysts suggest, however, that such forgiveness could substantially limit the ability of the multilateral agencies to provide future aid. Africa's Debt Burden Overview. The countries of sub-Saharan Africa owed $208.9 billion to foreign creditors at the end of 2001, according to data published by the World Bank.1 Of this, 81% ($168.7 billion) was long-term debt, 16% ($33.8 billion) was short-term debt repayable within a year, and 3% ($6.3 billion) was medium-term debt owed to the International Monetary Fund (IMF). The basic structure of Africa' s debt is very similar to most other regions. Most have long-term debt levels in the low 80% range and short-term debt in the mid-teens. There are two exceptions. South Asia has kept its short-term debt level below 4%, thus raising its long-term ratio to over 95% of total debt. By contrast, the Middle East and North Africa region carried 22% of its obligations as short-term debt, lowering its long-term ratio to 76%. The structure of a country's debt has considerable influence on the annual Congressional Research Service +** The Library of Congress 1 World Bank. Global Development Finance, 2002. Vol 2, pp. 24-49.

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