WASHINGTON - April 1 - Today Africa Action calls on the International Monetary Fund and the World Bank to cancel the 300 billion dollars of illegitimate debt owed by African nations. In the face of shocking and grim statistics on the impact of the economic crisis in Africa, it's more important now than ever that President Obama and his economic team act to stop the global economic meltdown and protect the poor. 

"Shrinking markets combined with the credit crunch means that governments will have less money to spend on important sectors such as education, health, and women's empowerment, as economic survival becomes their number one goal," said Gerald LeMelle, Executive Director of Africa Action.

Africa is facing a severe economic crisis that has already had serious ramifications on future growth.  Prices of commodities have fallen sharply. Remittances, credit, and foreign aid have all decreased, and food crises and fuel shortages have been reported throughout many countries. The global financial crisis is threatening to wipe out economic gains made by African countries in the past few decades, with millions of Africans being pushed below the poverty line.

An international response has been coordinated through the G-20 and the IMF. The G-20, an informal forum of a group of finance ministers and central bank governors from industrialized nations, is working to promote global economic stability to deal with the financial crisis. It is proposing a "Global New Deal" that would involve between $500 billion and $1 trillion in new lending to Global South countries from institutions such as the IMF and the World Bank. However, they have not removed the harmful conditions that will be required for any loans borrowed.

 "The situation will be exacerbated through these new loans by the IMF. The loans still carry conditions that have the potential to subvert economic growth, and urgent action is needed more than ever to see that all debt is canceled to Africa as it faces this current financial crisis," said Michael Stulman, Associate Director for Policy and Communications at Africa Action. "Focusing on lending cannot help these countries survive the economic crisis.  A stimulus package should include grants and money without the detrimental conditions we've seen in the past." So far President Obama has focused on drastically increasing funding for the IMF. Urgent action is needed by President Obama to push the G-20 to focus on canceling existing debts and eliminating harmful conditions upon which loans are granted to Global South countries.  This is a proven effective way to reduce poverty. Conditional lending will further increase African debt to astronomical figures that will leave many African nations in desperate circumstances.

For more information and all the latest analysis on debt and international financial institutions, please visit www.africaaction.org/