In October 1996 the IMF and World Bank came to a historic decision - to offer debt relief to a number of countries, on condition that they carried through Structural Adjustment Programmes.
Uganda was cited as a model country. Every Ugandan man, woman and child now owes the country's external creditors $170: half the population earns less than $ 100 a year. A large proportion of these debts were contracted by Idi Amin to buy weapons.
Uganda has been implementing IMF-backed Structural Adjustment Programmes and won the praise of IMF officials. Because of this the World Bank suggested last October that she would be the first country to benefit from debt relief under their Initiative. Now however it is becoming clear that Uganda's hopes for early debt relief will be dashed. Leading creditors from rich nations have blocked it on the grounds that coffee prices are improving and Uganda can expect more revenue from coffee in future. Therefore, they argue, she will be able to pay off her debts.
This decision puts at risk Uganda's plans for primary education expansion which the government had hoped to tackle using relief offered under the HIPC Initiative. Now children will have to be turned away or charged fees. Uganda pays $184 million a year in debt servicing - 10 times more than it spends on primary health care and 7 times more than on primary school education.
If Uganda is nor allowed relief while it enjoys political stability and growth, what chance is there for other countries?
If you want to help Uganda speak to Lynn Winter.
written by Lynn Winter
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page last updated 1 APRIL 1998