African debt attracted worldwide attention in June 1988, at the end of the annual summit of the seven most industrialized powers meeting in Toronto.

Their terse communique was an echo to an earlier appeal made by African leaders at the special OAU summit held in Addis Ababa on Nov. 29-30 1987.

The total debt of $100 billions held by 50 Sub-Saharan African countries is only about 9 percent of all LDC's debt -- less than the U.S.'s annual budget deficit. About two thirds of African debt is owed to public institutions.

This relatively small debt is an unbearable burden to some 600 millions Africans most of whom make only between $120 to $240 per year while facing a per capita debt of $400.

As a comparison, per capita income in Latin America is above $1000 with a debt per capita of $200.

In the USA those figures are better: $20,000 income and less than $3000 debt.

In 1988, the debt service /export earnings grew from 148 percent to 325 percent in Africa while the average for all LDC's grew from 82 percent to 157 percent.

Meantime, in the last 15 years, GDP per capita has fallen by 25 percent in Africa.

The situation is so desperate that the World Bank estimates that it will take countries like Somalia seven years of total export earnings to pay the debt while the poorest like Guinea Bissau are bound for about 19 years.

Needless to say that all these nations have to import almost everything from needles to flour, and other necessities of life.

Many people think that the only possible explanation as to why and how African countries got trapped into this hopeless situation is the mismanagement of public resources by their leaders who prefer to ride in expensive Mercedes while their people are starving. However the truth of the matter is that such generalizations are too simplistic to be true.

Most African countries export raw materials (coffee, rubber, copper) whose prices rose sharply for a very short period during the 1970's before falling consistently.

By 1986 terms of trade of most African exports got so depressed that in that year alone, expert earnings fell from $64 to $45.6 billion while the debt service reached $22.6 billion.

After the 1973 oil boom OPEC countries pilled up huge stocks of financial resources which the depressed western economies could not easily absorb.

To avoid unemployment, some countries advised their banking industry to increase non-concessional loans to developing countries including Sudan, Mauritania and Somalia.

Advised by Western experts, African countries undertook long term public investments of doubtful economic return such as oil refineries, steel or sugar mills. Even recurrent spending was often financed by non-concessional loans without provision for debt service.

Things worsened due to mismanagement and a bad world economic situation leading to capital flight. It is true that many African governments did not adjust early enough to the new hostile economic environment and cut public expenditure only when things got worse.

Nethertheless, some random factors which had a significant impact on the debt build up like drought, the oil crises, the slow down of world economy which depressed the demand for African raw materials or civil wars could hardly be predicted by African leaders.

The worsening of the debt situation forced the OAU to devote its first economic summit entirely to the debt issue. A consensus was reached that African countries -- even those that had followed IMF policy prescriptions -- would never be able to face their debt commitments without risking socio-economic and political unrest, because debt repayment conflicts with vital imports such as food, medicine and spare parts.

Foremost, African countries demanded an increase in the inflow of financial resources towards the continent in order to resume economic growth.

Since 1985, the IMF has been taking more money out of impoverished Africa than it had sent in, so they proposed that a limit be set at a ceiling of 20 percent debt service/export earnings together with longer rescheduling periods, concessional interest rates and debt forgiveness.

At the Toronto meeting, the G-7 agreed to a menu of options among which each country could choose between rescheduling for a longer period, grant concessional interests rates or plan debt write offs for the 20 poorest countries with a per capita GDP of $425 or less and a debt ratio of 30 percent or more.

Responding positively to the plan, France, Canada, Japan and West Germany were quick to adopt one option or another.

Stuck in budgetary problems the U.S. could not back this plan arguing that a special treatment for Africa may hinder needed economic reforms or become a precedent for others.

The Bush administration is now working with Congress to implement a provision of last year's appropriation bill which allows the president to make the debt payable in local currency to be used in programs targeted for the poorest.

U.S. taxpayers should tell their leaders that this need not be the case if debt write offs are granted to countries that have adopted economic reforms and when the U.S. rescheduled Indonesian debt in 1930 for 30 years at zero interest rate, it was no precedent.

Meeting in Washington, D.C. recently the financial ministers of the G-7 had no solution to this problem. A golden opportunity to revise the Baker strategy and boost debt relief already tried on a voluntary basis by some commercial banks was thus missed.