African Poverty and Debt

On a personal level, an individual has to be out of debt before they can begin to build wealth and grow financially, and a person in debt will always have a difficult time sustaining a comfortable life. However we are dealing with large, complicated countries and there is no one defined answer to whether poverty causes debt or debt causes poverty and even the relationship of the two can be confusing. The real answer to this is they both cause each other sometimes and sometimes debt has no effect on poverty and vice-a-verse, it all depends. In a country attempting to sustain life the real problem is poverty, debt is not even an issue when it comes to sustaining life (just look at the U.S.), debt would only be a bi-product of an attempt to bring a country out of poverty.

For many of the African countries, to come out of poverty quickly would mean an immediate increase in debt to other nations. However, a way not to come out of poverty quickly is to enforce Structural Adjustment Policies (SAPs). Basically these policies have been imposed to ensure debt repayment and economic restructuring. This is clearly a horrible idea for reducing poverty because to increase debt repayments spending on other things like healthcare, education and development all have to take a backseat to the debt-repayments, immediately increasing the poverty level of that country. (Shah, 2007)

Africa has so much going against them in the attempt to come out of poverty, everything from the brain drain, to civil wars, to degradation of the land, to disease and famine, Africa seems hopeless. The issue of debt vs. poverty is not in the hands of the country but in the hands of the people of Africa. Sure, the country can aid its people in rising out of poverty, but only the people can achieve this. My recommendation for eradicating poverty and later alleviating debt is to start with the people. The reason that many African countries cannot grow economically is because the people are suppressed by famine and disease. If you have to worry about what you are going to eat every night and you have 3 children suffering from HIV/AIDS I guarantee that you will have a difficult time furthering your education or your career. The solution is to first eradicate poverty and then repay debts. The enforcement of SAPs are a step in the wrong direction and only strains the finances of an already poor country. The answer is to first provide all the basic needs, clothing, healthcare, education, food, shelter, at a steady rate so the people can no longer worry about subsistence living and turn to industry and education to build up the country. It will not work the other way around. The people also need as much money as they can possibly obtain to pay for these basic needs day-in and day-out instead of the government imposing a tax to repay national debts. The best case scenario to eradicate poverty and eliminate debt would look something like this: African countries would begin by providing basic needs for all citizens on a daily basis (through increased spending and debt). The citizens then will have time to go out of the home to focus on industry and neoliberal development instead of subsistence living. This will create more exports and higher cash flow into the country. This higher cash flow will allow companies to grow and build wealth and to increase the salaries of their employees. The government will then be able to tax the citizens and businesses to repay national debts. Poverty must first be eradicated, even if it means going into debt, before debt is eliminated. The country must first get stronger then repay debt, the reason Africa is in debt is because of weak development, if the debt is repaid and development remains weak, Africa will return to debt in time. This is my attempt at a best case scenario, and we both know if the answer to the problem could be solved by an undergrad student at a US university, then the problem would already be fixed. I pray for the future of Africa.

Shah, Anup. "Structural Adjustment—a Major Cause of Poverty." Global Issues. 2 July 2007. 10 Dec. 2007 <http://www.globalissues.org/TradeRelated/SAP.asp>.