Africa Sovereign Debt 2023-05-02
2023-05-02
TAGS
Response quality
Questions & Answers
Q1
Partial Answer
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Context
The question addresses the issue of low and middle-income African countries struggling with sovereign debt, specifically mentioning the case of Somalia where 98.9% of government revenue was spent on debt financing in 2020.
What steps he is taking to help low and middle-income African countries with restructuring sovereign debt. In Somalia in 2020, a staggering 98.9% of Government revenue was spent on debt financing. Clearly, it is impossible for a state to tackle poverty in those circumstances, but the Government's most recent international development strategy largely omits debt relief.
The hon. Lady is quite right to raise the issue of Somalia, which is one of only three countries, I think, that has not yet received its heavily indebted poor countries settlement. She will be pleased that Britain is in the lead on the climate-resistant debt clauses, which will mean that, when a disaster strikes or when there is a specific event, countries will be able to delay all capital and interest payments for two years, which will then be added to the back end of the loan.
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Assessment & feedback
Commitment to prioritise debt relief in future strategy
Response accuracy
Q2
Partial Answer
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Context
The question refers to a previous statement by the Minister about leadership being lacking in addressing debt relief for countries like Zambia. The questioner highlights that 90% of international bonds owed by eligible countries are governed by English law.
Last week, the Minister said: “A time when crises are everywhere, but leadership is not. When we can save a bank in California in three days, but Zambia waits more than two years for debt relief.” I agree. However, the Minister knows that 90% of international bonds owed by countries eligible for the common framework are governed by English law, so what leadership is he demonstrating to ensure vulture funds cannot block debt-restructuring processes by simply refusing to come to the table?
The hon. Lady makes a very good point. I am flattered that she has read the speech I gave at Chatham House last Thursday. We are extremely concerned about the use of vulture funds, and Britain has been the lead country in trying to clamp down on them. I assure her that we will continue with that work.
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Assessment & feedback
Concrete steps or timeline for addressing vulture funds blocking debt-restructuring processes
Response accuracy
Q3
Partial Answer
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Context
The question builds on a previous statement by the Minister about leadership being lacking in addressing debt relief for countries like Zambia. The questioner highlights that 90% of international bonds owed by eligible countries are governed by English law.
Last week, the Minister said: “A time when crises are everywhere, but leadership is not. When we can save a bank in California in three days, but Zambia waits more than two years for debt relief.” I agree. However, the Minister knows that 90% of international bonds owed by countries eligible for the common framework are governed by English law, so what leadership is he demonstrating to ensure vulture funds cannot block debt-restructuring processes by simply refusing to come to the table?
The hon. Lady makes a very good point. I am flattered that she has read the speech I gave at Chatham House last Thursday. We are extremely concerned about the use of vulture funds, and Britain has been the lead country in trying to clamp down on them. I assure her that we will continue with that work.
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Assessment & feedback
Concrete steps or timeline for addressing vulture funds blocking debt-restructuring processes
Response accuracy