International efforts to reduce Africa's crippling debt are slowly helping to curb poverty on the continent, but the key to a real breakthrough is stronger economic growth, a top IMF official said on Friday.
The International Monetary Fund's Africa director Abdoulaye Bio-Tchane said the 1996 HIPC debt relief scheme had helped raise social spending in the world's poorest continent even before a major initiative to cancel debt approved by the Group of Eight (G8) rich nations at a summit last year.
"In the last six years we have already seen the resources created by HIPC spent on social sectors," Bio-Tchane told Reuters. "From 1999 to 2005, poverty reducing expenditures tremendously increased, by three percent of GDP on average."
After last year's Live 8 concerts organised by rock stars Bono and Bob Geldof to raise awareness of poverty in Africa, the G8-backed Multilateral Debt Relief Initiative (MDRI) dramatically upped the scale of debt relief.
So far 19 countries - 14 in sub Saharan Africa - have qualified for up to $50 billion in relief under the two schemes. The IMF - a much smaller creditor to African states than the World Bank or the African Development Bank - has forgiven some $2.8 billion in debt to these 14 countries, with several more on the brink of qualifying.
The impact of the new G8-backed scheme can already be seen, according to IMF studies, with African countries due to boost social spending by on average one percentage point of gross domestic product this year.
Half the nations are earmarking funds for education and health. In West Africa, Burkina Faso, Cameroon and Mali are prioritising infrastructure outlays, while a drought has forced Rwanda and Tanzania to spend on food imports and power.
High debts built up during the 1970s and 1980s by profligate and often corrupt governments and a decline in commodities prices left many African countries tottering under debt burdens.
Sub-Saharan African countries owed some $70 billion to multilaterals as of 2003, according to World Bank figures, or just under a third of their total debts of $231 billion.
The fight against poverty should receive a boost as sub-Saharan Africa's economic growth rate picks up to around 6 percent in 2007, after falling to around 4.8 percent this year due to the spike in international oil prices.