The Group of Eight richest industrialised nations plus Russia has today agreed to write-off more €33 billion of African debts.
The agreement provides 100 per cent write-offs for 18 countries straight away, with more countries to qualify later, British Finance Minister Gordon Brown told a news conference.
As G8 finance minsters met in London last night, the deal was far from agreed as wrangling over how countries qualify for the relief continued.
But this morning it became apparent they were clsoing in on an historic deal. Ahead of a lunchtime press conference, the EU President Jean-Claude Juncker and a Canadian official separately indicated a deal had been reached.
Germany, France and Japan had not agreed to the deal this morning despite increased optimism this week after the US, which had been stalling, sent signals indicating it was ready to sign up to a plan formulated by Mr Brown.
Officials in London today also said there was heightened tension between France and the US over how to handle the debts owed to the International Monetary Fund (IMF). France is concerned relief could diminish the lending power of the IMF but the US wants says the issue should not stand in the way of immediate assistance for poor countries.
The member countries’ heads of government are due at Gleneagles near Edinburgh, Scotland for a full summit next month at which further details and new aid measures are likely to be announced.
Max Lawson of charity Oxfam said debt-relief was an important first step but when the G8 leaders meet next month "many hurdles" remain.
"The first hurdle - debt cancellation - is only worth $2 billion a year at most for poor countries. G8 leaders need to urgently pick up the pace, respond to the calls of millions of campaigners around the world and put up an extra $50 billion of aid to fund the fight against poverty."
Malawi treasury secretary Milton Kutengule said the decision would help reduce poverty and Zambian finance minister Ng'andu Magande said more money would now be available for education and health programmes.
Agencies