Energy and ambition is what World Bank President Paul Wolfowitz says he felt during a recent eight nation tour of Africa which ended late last month.
Wolfowitz made stops in Tanzania, Ethiopia, Nigeria, Benin, Sierra Leone, Ghana and Liberia. The countries have all worked with the World Bank to help to resolve issues of debt. Some of those countries have participated in the bank's initiative for Heavily Indebted Poor Countries (HIPC).
Various African nations have been in heavy debt since the late 1970s, and early 80s, resulting from unexpected commodity price booms, rising oil price and a global recession. Since then, organizations such as the World Bank and others have taken on the task to alleviate fiscal problems arising from those events.
The HIPC works to help poor nations to wipe out existing debts by engaging in a series of reforms aimed at promoting accountability.
Ethiopia, the second most populous country in Africa, is an example of a nation that has developed steadily since it was first accepted under the HIPC program in 2004. The countryâ€™s real GDP growth was 8.9 percent in 2004/05, after an 11 percent growth rate in 2003/04.
Under the World Bankâ€™s lending program, the International Development Association, Ethiopia has received over $1.8 billion as of June 2006 for the funding of 23 projects which focus on rehabilitating agriculture, energy production, and developing health programs among other projects.
During his visit to Ethiopia at a press conference, Wolfowitz said the country had the potential to be â€œan important engine of growth for all of Africaâ€.
The World Bank and the International Monetary Fund launched the Heavily Indebted Poor Countries program in 1996 following concerns that excessive levels of debt hampered economic growth in some of the worldâ€™s poorest countries.
Creditors play a key role in the program. Their contributions go a long way toward providing opportunities for development to countries that are riddled with debt and poverty. Two thirds of HIPC countries are currently receiving debt relief which will total $59 billion in lower debt payments eventually. There are 29 such countries with another 11 still pending to receive debt relief.
Out of the 40 countries under the HIPC that are either under the initiative in the decision making process, a large majority, 32 are in sub-Saharan Africa.
Before a poor and indebted country can qualify for debt relief, the country needs to introduce a three-year performance plan which focuses on a variety of factors such as macro-economic programs intended to stabilize the countryâ€™s economy, reduce poverty and reform the public sector..
Once the plans are approved by the World Bank, the country reaches a decision point where it attempts to implement reforms. If all reforms laid out by the HIPC are followed by implementing a Poverty Reduction Strategy, then the country is granted irrevocable debt relief.
Wolfowitz pointed out that Africaâ€™s countries are overcoming their challenges in a speech at the Heritage foundation in Washington DC, recently. He specifically referred to a pair of small, poverty- stricken nations which, until recently, were marred by civil war and rebellion. Just recently Liberia became the first African country to elect a woman president.
â€œTo my surprise, because some of these countries were basket cases only a few years ago, countries like Liberia or Sierra Leone, I have seen progress in every single one. Africaâ€™s richest and best hope, like every other country, is its people; that is the greatest natural resource,â€ Wolfowitz added.
â€œAnd the challenge is how to unleash the energy of the people, how to give people the opportunity to improve their lives themselves,â€ he said.