African Unification Front
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THE LEGAL PRINCIPLES OF DEBT MANAGEMENT
The AUF adheres to the principle of Odious Debt, according to which no future government of the African Union, is under any obligation whatsoever, to repay the debts incurred by pre-unification regimes, unless the creditors can prove beyond doubt that the money was used for the benefit of the people.
Needless to say any financing that went into buying weapons that were used against Africans will not be returned and the creditors must face legal liability and fines if the African Union can prove that creditors knew what the funds were used for.
In 1989 World Bank President Barber Conable attributed up to one-third of the accumlated debt in Africa directly to weapons imports. Since the Second World War the vast majority of wars have been fought in Africa. Most of these wars were proxy wars between former colonial powers, the USA, China, and the Soviet Union.
Africa spends proportionally more on its military than does any other region of the world except the Middle East - about 5% of GNP in 1987. Some African states spend over 10% of their GNP on arms - more than twice that spent on education and eight times that spent on health care. In the 1980s Angola and Mozambique spent up to half the public budget on the war effort.
While actual percentages of funds spent on arms may be comparatively less than what some European states spend, one has to understand the spending in the context of comparison with domestic spending in other essential areas of the states economies, such as health, education, social stabilization, and housing. The militaries in Africa are the single largest consumers of public funds.
African governments spend up to 85% of their total revenues on the combination of military expenses and debt payments. States borrow money to buy arms, and then spend national wealth paying interest on the weapons credit. A World Bank report criticised military spending for having "diverted enormous resources from southern Africa's development, and [consumming] nearly 50% of government expenditures in countries experiencing the worst destobilization."
The African Union has eight soldiers for ever physician, two and a half times the proportion in donor countries. The combination of military spending and debt repayment creates an impossible situation in Africa, as states fail to meet basic needs of Africans. In parts of the African Union, some states, including Uganda, Sudan, DRC, Gabon, have cut back on spending for health clinics and school budgets in order to spare the military.
INTEREST RATES: THE HIGHEST CHARGE IN THE WORLD
In fact international banks hoard most of the credit destined for Africa. This represents the highest administrative charge in the world. The interest rates on real estate loans destined for Africa is always above 25%, compared to 4% to 7% for the rest of the world.
Review of Third Conference on LDC Debt
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