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Britain working on new package to cancel African debt
(Agencies)
Updated: 2005-06-09 10:01

Britain's finance minister, Gordon Brown, is finalising a new deal to erase the debts of Africa's poorest nations, which will likely be announced at a G8 meeting this week, a report said.

Officials in all the Group of Eight (G8) richest nations were working on the small print of the agreement, which has the support in principle of US President George W. Bush following a fleeting visit to Washington by Prime Minister Tony Blair on Tuesday, the Guardian newspaper said.

Britain's finance minister, Gordon Brown, seen here 07 June 2005, is finalising a new deal to erase the debts of Africa's poorest nations, which will likely be announced at a G8 meeting this week, a report said(AFP/File)
Britain's finance minister, Gordon Brown, seen here 07 June 2005, is finalising a new deal to erase the debts of Africa's poorest nations, which will likely be announced at a G8 meeting this week, a report said. [AFP/File]
Citing the finance ministry, it said confidence was high that there would be a full announcement when finance and central bank ministers from the G8 meet in London on Saturday.

"We would be quite surprised if we don't emerge with quite a healthy package at the weekend," the newspaper quoted one finance ministry source as saying.

Bush and Blair said Tuesday they were close to completing a proposal for rich nations to cancel 100 percent of debt for the world's poorest countries, ahead of next month's G8 summit in Gleneagles, Scotland.

Blair expressed hope of concluding a debt deal at the pre-summit G8 meeting starting Friday, comprising finance ministers of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

The Guardian said aid agencies believe the new package would generate at least 500 million dollars (409 million euros) initially, rising to one billion dollars as more countries became eligible for assistance.

At the same time, they warned than the funds fell far short of the amount needed for poor African countries to enable them to meet a set of United Nations Millennium Development Goals.

"As G8 finance ministers prepare to meet this weekend, the US/UK debt proposal looks like a step forward, but the big question is how many countries it will apply to, will it include IMF debt and how much money will it release?" Anna McDonald, the campaigns director of Oxfam, told the Guardian.

"Debt analysts calculate that at least 62 countries will need 100 percent debt cancellation to effectively tackle poverty and meet the Millennium Development Goals -- and this will cost around 10 billion dollars a year."



 
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