G-8 Leaders Stress Support for Africa

Der japanische Finanzminister Koji Omi, von links nach rechts, Bundesfinanzminister Peer Steinbrueck, der U.S. amerikanische stellvertretende Finanzminister Robert M. Kimmit und der britische Schatzkanzler Gordon Brown beim Treffen der G 8 Finanzminister am Samstag, 19. Mai 2007 in Werder bei Berlin. (AP Photo/Fritz Reiss, ) - - - The Japanese Finance Minister Koji Omi, from left to right, German Finance Minister Peer Steinbrueck, the U.S. Deputy Secretary of the Treasury Robert M. Kimmet and the British Chancellor of the Exchequer Gordon Brown during the meeting of the G 8 Finance Ministers in Werder near Berlin on Saturday, May 19, 2007. (AP Photo/Fritz Reiss) (Fritz Reiss - AP)

Some G-8 countries had expressed worries that cheap loans from China, which needs access to raw material such as oil and copper, could lead to another debt crisis on the continent.

Kimmitt said that good governance remained "critical" for economic development, along with maintaining sustainable debt levels in the poorest countries.

His remarks echoed that of the communique, which called attention to the quality of public investment to ensure debt sustainability.

"Not only does the concessionality of lending matter, but the returns on investment as well," an oblique reference to Chinese lending practices in Africa.

In the G-8's draft action plan, finance officials also expressed support for the British-led Extractive Industries Transparency Initiative, which requires governments to declare their tax receipts and royalty payments from natural resources companies, and those companies to declare how much they pay governments.

In the past, revenues from natural resources have been stolen by African leaders and their associates, depriving their governments of revenues while loading them up with debts.

But the G-8 action plan stresses that African governments themselves bear most of the responsibility for borrowing wisely.

After the meeting ended, Steinbrueck singled out China and said he wanted to address the issues of responsible lending at the meeting of the Group of 20 countries in Cape Town, South Africa, later this year.

That discussion should prevent China from relaunching "what we wanted to break with our debt relief" to African countries and ensure that "we can avoid the risk of such a debt cycle once more."

Still, Steinbrueck said he would not "want to go as far as to say all African countries understand our concern."

A German paper on Good Financial Governance in Africa prepared for the G-8 meeting said China should abide by limits laid down by the International Monetary Fund and the World Bank when it is lending to African countries.

"It is now important to avoid the creation of new, unsustainable debt," the document had said, noting the limits set by the IMF's and World Bank's framework for debt sustainability.

"All creditors should stick to this," the German document said, adding that call is in particular aimed at China "which mostly factors out aspects of good governance when awarding loans, such as to Sudan and Angola."

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Associated Press writer Susann Kreutzmann contributed to this report.