Cameroon gets debt cancellation
1 May 2006
Cameroon has qualified for debt cancellation of $2.4 billion - after meeting the onerous conditions set by the World Bank and IMF.
The debt cancellation itself is good news, and will release a significant amount of money that can now be used to fight poverty, instead of to pay the rich world. In 2004, Cameroon spent over $680 million on debt payments - while nearly a quarter of children under the age of five in the country are malnourished.
In this context, the wiping out of a large portion of Cameroon's debt is very welcome. Just over half ($1.3 billion) of the cancellation comes from the standard Heavily Indebted Poor Countries initiative (HIPC), which has been running since 1996. The remainder of the cancellation comes from the new debt cancellation scheme agreed by the G8 in 2005 under pressure from campaigners.
Whilst the outcome is welcome, Cameroon has had to wait a very long time for debt cancellation - and meet with some onerous and damaging conditions along the way. These have for instance included privatisation of the state airline and telecommunications company, which were opposed in Cameroon. These kinds of conditions (always attached to HIPC debt cancellation) undermine countries' sovereignty and can be very harmful. Jubilee Debt Campaign is calling for an end to such conditions through our Cut the Strings campaign.
