Africa Action: Activism for Africa Since 1953
Africa Action Talking Points on the G8 and Africa
July 2009
Four years after the Group of 8 (G8) wealthy nations’ summit of 2005 – with its promises to prioritize the health, well-being and economic development of Africa – the G8 nations will convene again this week. This opportunity to revisit the G8 promises reveals that too much time has been wasted and too little action has been taken towards reaching these goals.
The G8 countries make up a minority of the world’s population, yet they are the main cause of the climate change disproportionately impacting the world’s poor and exacerbating conflict and development challenges across the globe. They control a majority of global GDP, and thus possess the crucial capacity to direct attention and funds to the most pressing issues of our time. Yet, the priorities of the Global South, a majority of the world’s population, are consistently given short shrift, as rich elites control the global decision-making bodies and determine the flow of resources.
Key goals were set in 2005: the G8 pledged to cancel the onerous debt of low-income countries; to achieve universal access to HIV/AIDS treatment by 2010; and to drastically boost foreign aid, with a particular focus on Africa.
The G8 leaders met in Hokkaido, Japan for the 2008 summit. The leaders addressed several large issues, including those that relate to Africa. For climate change, they agreed to cut carbon emissions by 50% by 2050, with each nation setting its own target in the nearer term. As concerns African development, they reiterated the five year deadline for $60 billion in funding to help fight disease, including 100 million mosquito nets by 2010, and renewed the pledge to double aid to the continent to $25 billion by 2010. They called on nations with a food surplus to release their reserves and remove export restrictions. They called for an increase in oil production and refining capacities to keep the price of oil down. The leaders threatened further action against individuals in Zimbabwe who had been involved in the electoral violence and recommended that the United Nations appoint a special envoy to the country.
The conclusions that were reached in 2008 have yet to be effectively implemented. Climate change continues to be a major challenge, funding to combat disease in Africa is insufficient, encouraging the import of food into developing countries could have the effect of further undermining their efforts to feed themselves and oil production can often infringe upon human rights and have disastrous effects on the environment.
As the G8 leaders meet in Italy for the newest conference, new action must be taken to demonstrate that these stated objectives, along with those from 2005, which outline the most important goals relating to Africa, reflect more than just rhetoric.
From Gleneagles (2005) to L'Aquila (2009)
As a result of significant international pressure generated by activists pushing for social and economic justice, the 2005 G8 Summit agenda’s focus on Africa was specifically highlighted, and the G8 leaders boldly proclaimed their intention to address the causes of poverty in the region. Nevertheless, the stated goals that emerged barely begin to tackle the injustice and deep-rooted sources of Africa’s poverty, and even these targets have not received adequate attention from the elite wealthy nations.
Debt cancellation. Despite proclamations to the contrary, the 2005 G8 did not come near the goal of “100% multilateral debt cancellation.” Twenty-five countries qualified for debt cancellation through the Multilateral Debt Relief Initiative (MDRI), or 2005 G8 debt deal. Of these, 18 were African nations, and on average, each African country’s debt was cut by just under 65%, far below a full cancellation.
Debt cancellation has also come at a price: to be eligible for these programs, countries are forced to institute economic conditions imposed by the international financial institutions. Measures to ensure that the money freed by debt cancellation is used transparently on human development programs are an essential component of any such initiative. However, requirements that poor countries meet rigid IMF fiscal and monetary targets, privatize industries and remove subsidies on sensitive commodities in order to qualify have proven to impede the impact of debt cancellation on its intended goal – fighting poverty. Yet they remain a major part of the process.
Where debt cancellation becomes available, countries have used the opportunity to direct the newly freed resources towards investments in health, education, infrastructure and more. In Ghana, debt cancellation has been used with success to fund free early education, and in Mali, the funds were invested in improving the water supply and roads. The G8 nations must now work to expand debt cancellation for all countries currently burdened by massive and unpayable debt.
The need for debt cancellation becomes more pressing in light of the current global economic downturn. The World Bank report has predicted that the number of people living under the poverty line will increase by more than 46 million worldwide. The International Monetary Fund (IMF) forecasted that Sub-Saharan Africa would have an economic growth of 6.7% in 2009; this will not come to pass in the current economic climate. The prices of commodities have fallen sharply, and remittances, investment funds and foreign aid have all decreased. Credit is harder to secure, and foreign aid and investment have dried up. As a result, Sub-Saharan Africa is starting to see food crises and fuel shortages.
Universal access to HIV/AIDS treatment. The G8 proposed the year 2010 as a target date for the realization of universal access to HIV/AIDS treatment. Three years late, the World Health Organization has reported that the 2005 target of delivering life-saving medicines to 3 billion of the approximately 9.7 billion people who need it has been achieved. WHO cited a funding gap of over $8 billion and lack of leadership from G8 nations for the delay.
At the current rate of progress, less than half of all people in need of vital and life-prolonging medication will be receiving it by 2010, a far cry from universal access. The pandemic continues to wreak its worst ravages in Africa, which represents only about 11% of the world’s population but over three-quarters of global AIDS deaths in 2007. The expansion of antiretroviral treatment to 2.1 million Africans by the end of 2007 compared to 810,000 in 2005 represents progress, but much more must be done to close the gap for the nearly 70% of Africans living with HIV or AIDS who still lack access to lifesaving treatment.
The detailed fiscal year 2010 budget information on U.S. bilateral AIDS programs and the Global Fund to Fight AIDS, Tuberculosis and Malaria was released in May 2009. The Global Fund is a Public-Private Partnership that funds grants that are designed to counter AIDS, tuberculosis and malaria. It has become the main source of finance for global health initiatives. According to preliminary analysis by Africa Action, the U.S. will be under-funding these life-saving HIV/AIDS initiatives in Africa.
In July of 2008 Congress authorized $48 billion for the President’s Emergency Plan for AIDS Relief (PEPFAR). Over five years, the goal was to treat at least 3 million people with HIV, preventing 12 million new infections, caring for 12 million people, including 5 million orphans and vulnerable children. It was also set to train and retain at least 140,000 new health workers. To accomplish these goals PEPFAR would need $9 billion in 2010, but according to the new 2010 budget, it is only receiving $4.5 billion (a 2% increase from 2009).
The FY2010 budget was revealed just days after the White House announced a new six-year “Global Health Initiative”. Many people have already falsely suggested that funding for PEPFAR will be sustainable in light of the new Global Health Initiative, but Africa Action has found that either PEPFAR will not reach its target goals due to lower levels of funding in the five years authorized or in 2014 many health programs will essentially stop because of a lack of resources.
The plan allocates $51 billion for PEPFAR and malaria, but over six years rather than five. If PEPFAR were fully funded at $48 billion, that would leave only $3 billion available in the budget for 2014.
Based on estimates on the total funding needed to achieve the Millennium Development Goals for maternal and child mortality, the U.S. needs to contribute $24 billion over six years. The Global Health Initiative announced by the administration includes only $12 billion for all non-AIDS, tuberculosis and malaria “global health priorities.”
In terms of volume, the U.S. is the global leader in this area, poised to direct $50 billion over five years through an improved program of bilateral assistance to tackle Africa’s interrelated health crises of HIV, tuberculosis and malaria. Across the board, G8 leaders must commit to rapidly boost the funding directed towards the expansion of access to treatment within an evidence-driven holistic approach to fighting HIV/AIDS worldwide, but especially in Africa.
Increased and improved foreign aid. Despite the promise to increase worldwide aid by $50 billion by 2010, at the current rate, this goal will fall short by $30 billion. Almost forty years ago, in 1970, international donor nations committed to a UN resolution to devote 0.7% of their national incomes to foreign aid. Although Denmark, the Netherlands, Norway, Sweden and Luxemburg have exceeded this target, no G8 country has come anywhere close to this figure.
While more leadership from the largest European economies and Japan is absolutely vital, the failure of the U.S. to expand and reform its development assistance programs (outside of some progress on HIV/AIDS) is striking. U.S. levels of aid stand at only 0.16% of gross national income- the lowest percentage among developed nations. Is this aid being delivered effectively? ONE Campaign’s 2008 DATA Report ranked the US as tied for last among G8 nations on the quality of its official development assistance, and the Center for Global Development’s 2008 Commitment to Development Index for Africa ranked the US at 17th out of 21 rich countries for its aid component (and 13th overall).
The World Bank and the IMF have recognized that developing countries are in danger of being hit hard by the economic crisis through a lack of funding and dropping commodity prices. The IMF has warned that the economic growth in sub-Saharan Africa will slow to 1.5 % in 2009, down from an earlier prediction of 3.25%. African economies had been growing at around 6% since 2000; this economic downturn leaves many countries unable to afford basic services.
The IMF is trying to have the capacity to make concessional loans of $11 billion over the next five years, which is more than twice its current lending rate . However, most of the responsibility of ensuring this lies with the IMF’s donor countries. The donor countries need to live up to their 2005 commitment of doubling annual aid to Africa to $50 billion by 2010, and raising this to $75 billion by 2015 .
The IMF modified its Exogenous Shock Facility to provide more assistance and financial aid to countries hard-hit by the economic crisis in Africa. The IMF has also increased access to its Poverty and Reduction Growth Facility to countries. It is aiming to change its infrastructure so more countries can access aid, assistance, and resources from the IMF, without going through a lengthy process. It has also been proactive in stepping up technical assistance through the introduction of two new technical assistance centers in Africa.
No progress on trade. The global food crisis has drawn into sharp relief the human impacts of the fundamentally exploitative machinery of the global trading system. The failure of the Doha round starkly illustrates the lack of political will among wealthy nations, particularly G8 members, to seriously address these gross imbalances. Instead of offering concrete new proposals to use trade as an engine of sustainable poverty reduction trade, the communiqué produced by the G8 summit in Heiligendamm in 2007 simply rehashed empty rhetoric while ignoring the unjust trade initiatives G8 members are pursuing individually.
Restrictions on African access to U.S. and European markets, combined with agricultural subsidies to Western agribusinesses, undermine Africa's competitiveness and continue to constrict the continent's trade-related development. At the same time as they defend their own trade barriers tooth and nail, G8 countries continue to use bilateral trade agreements lacking transparency to undermine the policy space African governments have to use subsidies or other measures to develop nascent industries and secure local food production and regional distribution mechanisms.
The L'Aquila G8: A Just Agenda?
Darfur. At Gleneagles, the G8 noted its commitment to support the African Union’s peacekeeping mission in Darfur (AMIS), yet the human security situation in Darfur remains a disaster of historic proportions. As the violence, loss of life and displacement of communities in Darfur continues into its sixth year, addressing the conflict in Darfur and the fragility of the Comprehensive Peace Agreement between North and South Sudan must be at the forefront of the G8 discussion of peace and human security in Africa.
The 2009 G8 summit should be seized as an opportunity to coordinate technical logistical assistance for the full deployment of the UNAMID peacekeeping force authorized two years ago to replace AMIS in Darfur. The authorized strength of the force is 19,555 troops, but the force is operating on only 15, 351. G8 leaders can do more to coordinate and intensify their diplomatic and economic pressure on the government of Sudan to stop impeding this force’s deployment, as well as to stop arms transfers into the region.
Predatory activities of Vulture Funds. In the aftermath of the partial debt cancellation of the past few years, a new and potent threat has emerged. Vulture Funds, or companies that make huge profits by buying a country’s debt at a reduced price and then suing for the full amount, are siphoning away debt cancellation gains.
In two recent cases involving the Democratic Republic of Congo and FG Hemisphere, the DRC is being sued for defaulted payments amounting to$29,725,000, with additional payments for accrued interest, arbitration fees and sanctions. In one case, the sanctions alone could amount to $4 million a year. The International Arbitration Court and the Washington D.C. court system have decided for FG Hemisphere. The DRC is currently participating in the Heavily Indebted Poor Countries program to become eligible for cancellation of its debts to the IMF, World Bank and African Development Bank, as well as its bi-lateral debt to the G8 countries as part of the Multilateral Debt Relief Initiative.
In a case settled last year, Donegal International purchased debt owed by Zambia for $3.3 million and sued the Zambian government for $55 million. After a protracted and expensive legal case, a British court ruled that Zambia must pay $15 million to the vulture fund, more than a third of the debt cancellation gains Zambia anticipated for 2007. Due to debt cancellation, Zambia had previously used the newly available funds to eliminate user fees for basic health services. This ability has now been severely curtailed by the profit-minded activities of a vulture fund.
Across Africa, these cases are increasingly common. The G8 nations must take strong action to ensure that its efforts to cancel debts in Africa and elsewhere are not undermined by Vulture Fund activities. The G8 must work with the international financial institutions to ensure that country debts are not available for purchase by Vulture Funds, and G8 nations must use legislation to make such activity impossible in future. A code of conduct to ensure responsible lending practices on the part of creditors must also be a part of a long-term strategy to protect African nations from Vulture Funds.
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The resources needed to tackle the major challenges of poverty and exploitation exist, and the G8 nations possess the capacity to direct these resources effectively in partnership with the civil society and governments of the Global South. But the past four years have demonstrated that for the G8, the political will to act quickly and purposefully is lacking. If the international community is to assist Africa in reaching the targets for health, education and development, urgent action must be undertaken now. 2009 must mark a turning point – literally. Even if one were to accept the dubious “clarifications” of G8 members that Gleneagles’ written $25 billion promised scale-up of aid for Africa really should be interpreted as just $21.8 billion, just 14% of this commitment had been met. G8 nations must now achieve the gaping remainder of their promised increase through a dramatic scale-up between now and 2010.
