Review of techniques for debt reduction and conversion (SWAPS) and their application to the African situation

Abstract

The cultural, social, political and economic implications likely to arise as a result of the adoption of a debt conversion programme must be considered. There is consensus that adjustment in Africa must continue. However, on the one hand, it has been demonstrated that structural adjustment efforts composed only of consumption and expenditure cuts, without short term benefits to the people, are not sustainable because they end-up eroding the political base that is supposed to support them. On the other hand, if adjustment is judiciously combined with debt conversions and additional concessional financing aimed to reach the social and economic needs that have been neglected as a result of the debt crisis, then recovery has a firm basis for sustainability.