Africa’s Debt Burden and the HIPC Initiative: Cameroon, from Challenges to Opportunity

Abstract

Famine, drought, ethnic and regional conflicts, authoritarian rule, mismanagement, embezzlement of government funds, and corruption are just a few of the problems that plagued the continent of Africa in the postindependence/postcolonial period. These problems have been exacerbated by the prevalence of HIV/AIDS, which has ravaged many countries in the continent, particularly in the Sub-Saharan region. Along with AIDS, Africa’s excessive debt crisis has perhaps had the greatest impact on the political, economic, developmental, and social psyche of Africa today.1 The causes of Africa’s debt crisis are numerous, complex, and profound. The burden of debt has had deleterious effects in most countries, including a decline in the quality of life, a negative impact on investments by governments in physical and social infrastructure, an unintentional outcome of capital flight, and subordination of the interest and well-being of Africans to those of wealthy countries and institutions, as well as limits on private investments. Furthermore, the external debt burden has prevented many countries on the continent from achieving or reaching their Millennium Development Goals (MDGs) by 2015. The severity of Africa’s debt crisis convinced multilateral and bilateral creditors (international financial institutions) and governments in industrialized countries to propose and implement economic recovery measures designed to ameliorate the continent’s crumbling economies and debt problems.