Zambia benefits as G8 debt relief takes shape

Moomba (Zambia), Jul 3: Zambian high school student Bibian Phiri will conduct her first science experiment this year, a small but important breakthrough paid for by a massive poverty relief plan for Africa.

Critics have used the July eight anniversary of last year's Group of Eight (G8) Africa plan to highlight how few of its promises to Africa have been kept, with pledged aid still unavailable, funding for HIV/AIDS drugs still insufficient and agricultural trade barriers still hobbling African exports.

However, Zambia has become a showcase for the successes of one plank of the poverty plan: debt relief.

Phiri's school, north of Lusaka, will see its first science lab built with government money that once went to service Zambia's external debts. The 16-year-old says this will help her realise her dream of becoming a doctor.

''The new laboratory will really improve my knowledge because I will be conducting experiments instead of just relying on text books,'' she said.

Zambian officials say Phiri's laboratory, and countless other improvements, are the direct result of debt being forgiven by donors such as the International Monetary Fund, the World Bank and bilateral lenders.

''The debt relief programme has helped us to spend much more on new infrastructure like schools, hospitals, roads and bridges,'' said Gunston Chola, deputy education minister and member of parliament.

''Funds directed to projects like new teachers' houses under the PRP (poverty reduction programme) in my area have really helped to improve the lives of people,'' Chola added.

The 2005 G8 summit in Gleneagles, Scotland, ended with an agreement by the participating countries to add a total of 50 billion dollars in aid for all developing countries by 2010, including an expected 25 billion dollars for Africa.

Other promises included making HIV/AIDS drugs available to all who needed them and pushing through trade reforms to open rich world markets to African farm exports.

Critics say few of these promises have been kept, and even the plan's chief promoter, British Prime Minister Tony Blair, acknowledged that rich nations had failed to make progress on some of the key points of the deal.

BILLIONS IN DEBT FORGIVEN

In Zambia, however, the impact of the G8 plan is already being felt as debt relief takes shape. One year after Gleneagles, Zambia's foreign debt is 502 million dollars compared with 7.1 billion dollars in June last year.

Officials say Zambia will save almost 400 million dollars in debt payments over the next three years -- a figure expected to grow when another debt relief package is approved in July.

The saving is being ploughed into education, health and rural infrastructure to try to end the poverty that has left 65 per cent of the country's 10 million people living on less than a dollar per day.

''It is our belief that the best way to reduce poverty is by empowering people with quality education and ensuring they receive good health care,'' Finance Minister Ng'andu Magande told Reuters. Zambia boosted its health budget to 18 percent, or 323.1 million dollars in 2006 from 12 per cent of the total budget the previous year, while its education budget rose to 26 per cent, or 484.5 million dollars, in 2006 from 24 per cent in 2005.

The country has recruited 4,578 teachers this year, bought new desks and renovated or built hundreds of new schools and, most important, eliminated school fees for parents, a crippling burden in many poor African countries.

''I am happy that I do not have to think of how I will pay my child's school fees any more. I can now spend a bit more on food for the family,'' said Frazer Mayaba, who runs a barber's shop in Lusaka.

User fees at hospitals and clinics have also been abolished to give people access to free basic medical services, including free AIDS drugs as part of a programme to dramatically increase the number of people on the life-saving medication.

NEW MONEY

Magande said the debt relief, which is a sign of confidence in Zambia's economic management, was leading to new aid deals. Donors have committed a total of 100 million dollars in grants and loans with low interest in the past four months for agriculture development.

The new money has revived Zambia's plans to diversify its economy from copper and cobalt mining which made it, like many African countries, vulnerable to swings in world commodity prices.

Subsidised seed and pesticides will be provided for small-scale farmers, a policy that officials hope will boost production of staple white maize and end the food shortages which often hit the country.

New farm blocs are being opened up with newly-built roads and power lines. Dams have been constructed in rural areas for drinking water and irrigation, and foreign investments are expected to double the country's sugar production to more than 550,000 tonnes.

Zambian economists acknowledge the country is benefiting far more than some of its African peers, bolstered by relatively sound and pragmatic government economic policies that still elude many other governments on the continent.

They say that debt relief, as the simplest and most immediate strategy for ending African poverty advocated at Gleneagles, was bearing real fruit.

''Zambia has become a beacon and should be used as an example as to how the rest of Africa should handle the debt forgiveness,'' said Ignatius Chica, treasurer at Citibank's ambian subsidiary.

REUTERS