Campaigners Welcome Africa Debt Deal

Aid agencies today welcomed the US concessions on debt relief for Africa announced following Tony Blair's meeting George Bush, but warned the deal did not go far enough on debt cancellation or increasing aid.

The prime minister's trip to Washington had produced some useful movement on multilateral debt, the agencies said, but even on this subject the deal fell short of expectations. Mr Bush said yesterday the US would provide the additional funding to cancel around $15bn in debt.

The announcement from the US signalled only a deal on debt owed to the World Bank and African Development Bank, not the IMF, they said. In addition, only around 15 African states would initially meet the conditions imposed by rich nations for debt relief, and some heavily indebted countries, such as Nigeria, were not eligible at all.

Mr Blair said today that he would also press the US and other G8 nations to open their markets to African products, and tackle the issue of US and European farm subsidies that put African producers at a disadvantage. He told the House of Commons during prime minister's question time that he had discussed the issues with Mr Bush.

Mr Blair flew to Washington yesterday for preparatory talks with Mr Bush ahead of the G8 meeting in Gleneagles, Scotland next month. The prime minister has made African development and climate change key issues on the agenda for the UK's presidency of the G8.

Action Aid said yesterday's announcement marked the first time that Mr Bush had conceded that debt cancellation must be financed through additional funds rather than existing aid budgets, which would cut payments to African countries.

Romilly Greenhill, the charity's policy director, feared that G8 finance ministers meeting this weekend in London would be unable to reach a deal on IMF debt cancellation using the organisation's own resources. The result would be that poor countries continued paying out to the IMF, which currently accounts for about a third of the debt owed, she said.

The US has refused to back chancellor Gordon Brown's plans to finance IMF debt relief through a revaluation or sale of IMF gold reserves. Mr Blair had indicated before the meeting that he did not expect the US to back Mr Brown's international finance facility proposal.

"It looks like a serious debt initiative is on the table, and Christian Aid is firmly supporting it," said Jonathan Glennie, a senior policy officer at the agency. He added, however, that the scheme needed to cover far more countries, and insisted that forcing poor countries to make often harmful economic concessions before delivering debt relief would only harm their chances of development.

One of the main planks of Mr Blair's plan to help Africa meet its millennium development goals has a been a doubling in aid to the continent from $25bn to $50bn. Here the agencies felt he had walked away with very little.

"It's a slap in the face for Tony Blair, who went over to Washington to have the US sign up to increased aid, and got nothing in terms of aid," said John Hilary, the campaigns and policy director at War on Want.

It was not immediately clear whether the single announcement of increased US aid - £370m targeted for famine relief in Ethiopia and Eritrea - was new money, or simply an allocation from the existing US aid budget, the agencies said. Bush aides said they believed the president would announce further aid.

Mr Bush and Mr Blair met as the UN prepared to release a study saying three million children under five will die in the poorest countries of sub-Saharan Africa as a result of the failure to meet millennium development goals by the target date of 2015.

The study, conducted by the UN development programme and due for release tomorrow, found that on current trends, five million children would die if Africa misses its goal to cut infant mortality by two-thirds, as compared to two million if the target were met. On current trends Africa will miss the 2015 target by 100 years, the report will say.