Debt relief deal agreed for world's poorest countries

LONDON - The world's wealthiest countries have clinched a deal to wipe out more than US$40 billion ($56.8 billion) of impoverished nations' debts in a drive to free Africa from hunger and disease.

The deal was struck by finance ministers from the Group of Eight industrialised nations in London after months of tense negotiations and leaves leaders to consider proposals for doubling aid at a summit in Gleneagles, Scotland, next month.

British finance minister Gordon Brown said: "We are conscious of the abject poverty that so many countries and individuals face. We're being driven forward by the urgent need to act. We've found ourselves united with a shared purpose."

He said the debt of 18 mainly African countries' to multinational lenders would be cancelled immediately. More nations would qualify in the months and years to come.

United States treasury secretary John Snow called the deal "an achievement of historic proportions".

Debt relief campaigners welcomed the deal but demanded more.

Rock star Bob Geldof, who has campaigned against poverty and disease in Africa for over two decades, has urged a million people to mass in Scotland to drive home the point to the G8 leaders, and is organising a series of rock concerts in the run-up.

Hailing the accord, Geldof said, "Tomorrow 280 million Africans will wake up for the first time in their lives without owing you or me a penny from the burden of debt that has crippled them and their countries for so long."

But he cautioned: "We must be clear that this is the beginning and the end will not be achieved until we have the complete package demanded by the Commission for Africa of debt cancellation, doubling of aid, and trade justice."

Other campaigners complained that more than 18 countries had to be helped now if rich nations were to ever make good on a United Nations pledge to halve world poverty by 2015.

African countries cheered the deal though some questioned the choice of beneficiaries.

"Debt cancellation will provide us with relief on the budget. It will give us enough money to spend in education, health and other social sectors," said Zambia's finance minister Ng'andu Magande.

The deal, which followed two days of tense and often heated negotiations will provide rapid relief to countries such as Rwanda, Ethiopia, Mauritania and Zambia as well as, beyond Africa, to Honduras and Bolivia.

German finance minister Hans Eichel said that the value of debt relief could rise to about US$55 billion as other countries became eligible for help.

- REUTERS