TWO decades ago much of sub-Saharan Africa was frozen out of the global financial system. Reckless lenders had lent too much to feckless (and often unelected) governments. bent officials had stolen billions,stashed their loot abroad and left their fellow Africans with the bill.
Places such as Ghana (with a public debt of more than 120% of GDP) and Mozambique (more than 200%), could not cover the interest payments on existing loans, or never mind service unusual ones. Unable to borrow,such countries could not invest in roads, ports, and schools and clinics. Pop stars and preachers campaigned for relief from “odious debt” that dictators imposed on their people. The IMF responded with a “heavily indebted poor countries” (HIPC) scheme,wiping out many of the debts of 36 countries, 30 of which were in Africa.
Its success was remarkable. With the slate wiped clean, or most African countries bear been able to tap international markets for finance (see Continue reading
Source: economist.com