G-8 finance officials stress support for Africa

WERDER-HAVEL, Germany (AP): Group of Eight finance ministers and officials called Saturday for responsible practices in lending decisions to African countries and vowed not to forget pledges to the poverty-stricken continent. 

At the conclusion of two days of talks under tight security at a resort on the shore of Lake Schwielowsee, officials from Germany, Italy, Britain, Japan, Canada, Russia, the United States and France reaffirmed "our commitment to meeting our responsibilities as donors'' to Africa. 

Attendees included Gordon Brown, Britain's next prime minister, and U.S. Deputy Treasury Secretary Robert Kimmitt, who came instead of his boss, Henry Paulson. 

The officials said Africa would be a central point of next month's wider G-8 summit in Heiligendamm, and called for more aid, increased debt relief and improved financial oversight. 

"We reaffirm our commitment to meeting our responsibilities as donors, in particular the importance of delivering on our aid commitments,'' the group said in its statement. It added that with improved financial management by African nations and increased investment, there was a need for "special attention to particular needs of post conflict and fragile states.'' 

But advocates for Africa said the summit did not focus enough on ensuring the continent receive funding pledged to it, and urged a more thorough accounting next month when the leaders of the G-8 themselves meet on the Baltic Sea coast. 

"The G-8 finance ministers have shown collective amnesia, choosing to forget their promises to Africa,'' said Max Lawson of Oxfam International. "(German) Chancellor (Angela) Merkel has got just 18 days to show true leadership, berate her fellow leaders into action and avoid embarrassment in the eyes of the world and the denial of hope for millions. The German G-8 must not be remembered as the summit of shame.'' 

Two years ago, a British-hosted G-8 summit focused on forgiving debt to Africa and helping it run itself better in a bid to lift the continent from poverty. 

But critics said that pledges of euro50 billion (US$67 billion) a year in aid had fallen short. 

"The G-8 must start writing checks that don't bounce; checks that their African counterparts can actually cash,'' said Oliver Buston, the European director of Debt AIDS Trade Africa, or DATA, which was formed by U2 singer Bono. 

"Heiligendamm is the last chance for the G-8 leaders to rescue their reputation,'' he said. 

German Finance Minister Peer Steinbrueck and his G-8 colleagues were joined by officials from Ghana, Cameroon, Mozambique, South Africa and Nigeria, and by Donald Kaberuka, president of the African Development Bank for the meeting outside Berlin. 

Some G-8 countries had expressed worries that cheap financing from China, which needs access to raw materials such as oil and copper, could lead to another debt crisis on the continent. 

Kimmitt said that good governance remained critical for economic development, along with maintaining sustainable debt levels in the poorest countries. 

His remarks echoed those of the communique, which called attention to the quality of public investment for debt sustainability, noting that "not only does the concessionality of lending matter, but the returns on investment as well,'' an oblique reference to Chinese lending practices in Africa. 

In the G-8's draft action plan, finance officials also expressed support for the British-led Extractive Industries Transparency Initiative, which requires governments to declare their tax receipts and royalty payments from natural resources companies, and those companies to declare how much they pay governments. 

In the past, revenues from natural resources have been stolen by African leaders and their associates, depriving their governments of revenues while loading them up with debts. 

But the G-8 action plan stresses that African governments themselves bear most of the responsibility for borrowing wisely. 

After the meeting ended, Steinbrueck singled out China and said he wanted to address the issues of responsible lending at the meeting of the Group of 20 countries in Cape Town, South Africa, later this year. 

That discussion should prevent China from relaunching "what we wanted to break with our debt relief'' to African countries and ensure that "we can avoid the risk of such a debt cycle once more.'' 

Still, Steinbrueck said he wouldn't "want to go as far as to say all African countries understand our concern.'' 

A German paper on Good Financial Governance in Africa prepared for the G-8 meeting said China should abide by limits laid down by the International Monetary Fund and the World Bank when it is lending to African countries. 

"It is now important to avoid the creation of new, unsustainable debt,'' the document had said, noting the limits set by the IMF's and World Bank's framework for debt sustainability. 

"All creditors should stick to this,'' the German document said, adding that call is in particular aimed at China "which mostly factors out aspects of good governance when awarding loans, such as to Sudan and Angola.''

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