(Adds comments from Oxfam, DATA)
POTSDAM, Germany (Thomson Financial) - G8 finance ministers have urged China and other countries lending to Africa to adopt 'responsible' practices when giving aid to the continent in order to ensure the money is managed well and can be repaid.
Without directly naming China, the G8 said: 'We commit to applying responsible practices in our lending decisions. To this end, we urge all borrowers and creditors to share information on their borrowing and lending practices.'
The statement was contained in paragraph six of ten-point plan on 'Good Financial Governance in Africa', and according to G8 sources, it was meant to call particular attention to China, which they said has excluded the criteria of good governance when lending money to Sudan and Angola.
At a press briefing this afternoon, German finance minister Peer Steinbrueck -- whose country holds the rotating G8 Presidency -- said the issue of ensuring borrowers can manage their debts would only gain acceptance among creditors if other countries such as those in the G20 group adopt the same principles.
'I am referring to China,' he said. China is in the G20 group that will meet in Cape Town, South Africa later this year and Steinbrueck said the debt sustainability issue will be on the agenda there.
The issue of making sure that creditors lend money to avoid the cycle of 'lend-and-forgive' was echoed as well in the G8 communique issued today at the end of their two-day meeting.
'We encourage the use of the debt sustainability framework by all borrowers and creditors in their decisions,' the communique said.
The communique said the debt sustainability framework, developed by the International Monetary Fund and the World Bank, provides an important guiding tool for decisions on new borrowing and lending.
'Improved financial governance and aid flows must go hand in hand if we are to tackle poverty...We encourage the use of the debt sustainability framework by all borrowers and creditors in their decisions,' it said.
The G8 meeting -- which took place amidst criticism from activists who accuse the group of failing to keep promises to boost annual aid to the poorest countries by 50 bln usd by 2010 -- ended also with affirmation of 'our commitment to meeting our responsibilities as donors, in particular the importance of delivering on our aid commitments.'
But Oxfam International later dismissed the pledge, charging that the ministers had 'shown collective amnesia, choosing to forget their promises to Africa.'
'The G8 money men failed to turn around their promises to Africa and (German Chancellor Angela) Merkel and the rest of their bosses must do better in Heilingendamm, telling us how and when those promises will be met,' it said.
G8 heads of state and government are to hold a summit on June 6-8 in the German resort of Heilingendamm, over which Merkel will preside.
Africa advocacy group DATA (Debt Aids Trade Africa) said the G8 'must start writing cheques that don't bounce; cheques that their African counterparts can actually cash.'
'Just yesterday, we heard of a 20 bln usd commitment to Africa from China. China is not a good partner to Africa in every sense but it does keep its word on the cash -- a lot more than can be said for most of the G8 at the moment,' DATA European Director Oliver Buston said. marilyn.gerlach@thomson.com mog/vlb COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.