Second, longer repayment periods, with generous grace periods, should be allowed in rescheduling other official loans.
And third, and of crucial importance, the creditor countries should reduce the interest rates payable on these debts to well below market levels.
Since this British initiative, there has been growing recognition for example, at the Venice Summit - that the basic analysis is inescapable. And the reason for singling out the poorest countries of Sub-Saharan Africa for special treatment has been generally acknowledged. What is needed now is action.
The United Kingdom has in fact almost completed already the process of converting aid loans to grants for Sub-Saharan Africa. Denmark and the Netherlands have also made good progress on this front. I hope the other industrialised countries that have not yet done so will follow suit.
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The industrialised countries generally, meeting together as the so-called Paris Club, have made useful progress in rescheduling debts on more generous terms. New arrangements have already been agreed for four African countries Mozambique, Mauritania, Uganda and Zaire. Mozambique, for example, where new adjustment measures are just beginning to have their effect, was given twenty years to repay its rescheduled debts, instead of the conventional ten years. More such arrangements are in prospect.
However, there has not yet been sufficient support from other creditor countries for my proposal for an interest rate reduction on these debts. This is certainly a new departure in the handling of the debt crisis. But it is absolutely essential if we are to make any real progress in the case of Sub-Saharan Africa.
The plain fact is that, without some reduction of interest rates, the debt burden on the Sub-Saharan countries will continue to get worse, rather than better, as indeed has been happening since 1980. Many of these countries have no realistic prospect of meeting even
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