play videoHonorary Vice President of IMANI Africa, Bright Simons
Honorary Vice President of IMANI Center for Policy and Education, Bright Simons has shared his view on recent calls for debt cancellation for developing countries, particularly in Africa.
He however believes that the call is not viable as the traditional arguments for debt cancellation are no longer applicable in the present economic context.
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“Because the nature of who is lending has changed, the debates we all supported around the early 2000s about owing debt no longer apply.”
“In the early 2000s and the 1990s, a significant portion of Africa's debt was owed to official creditors like the IMF, World Bank, and rich country governments. These institutions lent money based on specific programs, which meant that if countries were unable to repay, blame could be shared between the lenders and the governments.”
He said this during a podcast dubbed; Doha Debates and hosted by journalist and senior analyst at the International Crisis Group in Nairobi, Nazanine Moshiri, discussing the current sentiment on African debt cancellation.
Bright Simons, however, clarified that the situation could be different on the part of private investors where he argued that, “In the case of private investors, they don't have that influence. If Ghana's policy fails, and the Ghana government cannot pay back, we cannot expect the same degree of blame sharing.”
To address the issue, he suggested a comprehensive analysis that includes domestic debt when discussing debt concerns for African countries and the need to differentiate between debt restructuring and debt cancellation.
