During 1992 and 1993 and indeed subsequent years, there was a lot of anxiety in academic research and civil society organizations as well as in Faith Based Organizations (NGOs and FBOs especially) on the structural adjustment programs (SAPs) that were being implemented by African countries as part of their programs with the World Bank and the International Monetary Fund (IMF). The anxiety was centered on both the short and long term effects of SAPs but more importantly, by the reality of a different expectation of what the north could do to save the untenable reality of African high indebtedness and inability to pay back their debts.
The SAPs were in themselves deepening the debt crisis as a result of currency devaluation measures African countries had to undertake. African countries were being faced with higher debt repayment obligations than they were able to spend on health and education: compromising African development prospects. It was not clear if Creditor countries could write off the debt and usher in a Marshal Plan as was the case with USA and Germany after the Second World War which enabled Germany to rise from the ashes in spite of its negative global intent.
Instead, the north offered the infamous Structural Adjustment programs (SAPs) through which the south including African countries, had to implement reforms towards reduced budget deficits, devaluation, reduced domestic credit expansion, freeing controlled prices and interest rates, reducing trade barriers, and privatizing state enterprises. The World Bank provided adjustment loans which included structural adjustment loans, sectoral structural adjustment loans and structural adjustment credits. At the time, everyone knew the consequences of this medication: a blanket reduced deficits idea was not a good one since in Keysian economics budget deficits aimed at infrastructure and capital formation is really not a bad idea! It creates employment and wealth needed for poverty eradication. Yes, budget deficit for consumption is a bad idea and should be limited to the IMF prescription of 3 percent of the GDP. So, there seemed to have been a hidden agenda in having a blanket ban on budget deficits. Devaluations really broke the camel’s back because devaluation was there just to reduce the ability of African countries to pay and to create a situation in which Africans had to work even harder. This was in many ways a form of primitive accumulation of wealth from Africa to the north.
Reduced domestic expansion was equally bad for the much needed economic expansion through increased credit for capital formation, expanded production and exchange and business investments. Of course not good for consumption e.g. Imports of cars by the Zambian elite. There should not be a blanket reduction in expansion of credit!! The consequence of a reduced expansion of credit was to reduce job creation, which was and is still badly needed in situations of poverty.
The IMF provided so called Structural Adjustment Facilities and later called Poverty Reduction and growth Facilities.
The above was just a glimpse of some of the immediate concerns that occupied the minds of people in civil society. It was essential therefore that there be some voice at different levels to provide some kind of countervailing power to the forces that were imposing some direction to the future of the African continent. At the SAPES Meeting in Lesotho in 1992 it was agreed that while SAPs were a key issue to research and write about, indeed lobby on as was being done by SAPES, a new focus on Debt in itself was essential.
In 1994 Opa Kapijimpanga started work on Debt and linked up with the Forum on Debt and Development FONDAD then based in London and eventually “taken over” by the European Network on Debt and Development (EURODAD) based in Brussels. AFRODAD was therefore a platform for Africa while EURODAD was a platform for Europe. There emerging platforms in Latin America and Asia that both EURODAD and AFRODAD worked with beginning at the Social Summit in Copenhagen in 1995.
During 1994 and 1995 Opa Kapijimpanga travelled across the continent to gather support for creating country platforms for discussing the debt crisis. Civil society organizations in Uganda, Mozambique, Zambia, Tanzania, Kenya, Cameroon, Nigeria, Zimbabwe, Angola and Ethiopia were enthusiastic about the idea and they boarded the AFRODAD train. From the very beginning it was agreed that AFRODAD would only be the African Platform for the various country coalitions which would undertake research and analysis at country level and engage their governments and creditors at the country level. Using the AFRODAD platform they would engage the sub-regional (e.g. ECOWAS), regional (Africa Union, Economic Commission for Africa, the African Development Bank etc.) and multilateral institutions at the global level (World Bank, the IMF, the United Nations). Coalitions on Debt were formed in these countries during 1995 and 1996. Some survived and others did not and for various reasons. Nonetheless, the various formations participated in the campaigns alongside the Jubilee 2000 movement and others to secure debt relief for African countries which started with various Paris Club initiatives and was concluded with the HIPC process followed by the Multilateral Debt Restructuring Initiative (MDRI) of the IMF with the last country Chad having reached the Completion Point in March 2015! The whole process took nearly 20 years!
Today AFRODAD is concerned with ensuring that the African continent does not slide back into being heavily indebted and is focused on influencing African governments to institute and implement policies and practices for sustainable development and eradication of poverty through development and implementation of sustainable debt policies; transparent, accountable and efficient mechanisms for mobilization and utilization of domestic resources; and effective use of international public finance.
The major donors that supported AFRODAD since 1994 are HIVOS, NOVIB, the Church of Sweden (who also provided seed money for Uganda Debt Network), Action Aid, Bread for the World, CAFOD, Canadian Council for International Cooperation, Christian Aid, Canadian International Development Agency, Commonwealth Foundation, Diakonia, the UK Government Department for International Development (DFID), EED, the Ford Foundation, the Gates Foundation, IBIS Denmark, KEPA Finland, MS Zimbabwe, NORAD, Norwegian Church Aid, Oxfam, SOMO, TROCAIRE, United Church of Canada, United Methodist Women, Welthaus, and the World Council of Churches.