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Guides: Poverty in Africa

Last Updated: Thursday June 09 2005 15:30 GMT

Borrowing money

Mozambican sugar workers
Fifty years ago African nations were encouraged to borrow huge amounts of money to spend on farming and businesses.

But in many cases it was spent on other things like dams and airports.

Some aid was also stolen by corrupt leaders and used to pay for war.

When you borrow money from a bank, you have to repay it, plus a bit extra. This is called interest.

African countries found they couldn't pay interest on their debts. The interest was added to the total amount they owed, leaving counties more and more in debt.

Between 1995 and 1997 for example, Mozambique spent more on paying back its debts than on health and education.

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