Sub-Saharan Africa is considered to be the poorest region of the world. Many years Sub-Saharan Africa was spending billions of dollars trying to repay its debts to other rich countries and international institutions such as the World Bank and International Monetary Fund. Many countries in Africa spend more money each year on debt than on health care, education and other important and urgent needs.
Africa's huge debt burden is the main biggest obstacle to the continent's development. African debt is so huge if to compare it to the continent's income that it seems that it cannot be repaid.
Debt relief is the only possible solution for many African countries.
According to American Friends Service Committee there are three main types of international debt:
- Bilateral: a government owes money to another government
- Multilateral: a government owes money to a lending institution such as the World Bank
- Private: a government owes money to a private institution, like a bank.
African debt includes all three types; however, multilateral creditors such as the World Bank, IMF, and African Development Bank are the largest creditors to African nations.