Brenda Mwila (left) is the only nurse at the rural clinic, Lusaka. Credit: Oxfam
Cancelling debt can make a real difference.

Debt and Aid

Two big issues seriously affect poor countries’ chances of beating poverty. One is the amount of aid they get. The other is the amount of debt they repay.


Across the world, impoverished countries are being forced to repay debts far bigger than original loans, instead of spending precious cash on essentials like schools and hospitals.
Bangladesh, for example, has to make crippling debt repayments, when it desperately needs to use money to pay for better health care and education – especially for the 50 million Bangladeshis who survive on under a dollar a day.

Cancelling debt can make a real difference.

Since Zambia’s debt was cancelled in 2005, its government has been able to introduce free health care for people in the countryside – scrapping fees that once stopped millions getting care they needed.

And education got a boost too – extra funds made available by debt relief also paid for 4,500 badly-needed new teachers.


Making sure developing countries get the aid money they need is just as important as cancelling their unpayable debts.

Because aid really works.

Millions of children in Tanzania, Uganda, Kenya and Malawi are now going to school, thanks to a combination of debt relief and aid.

And roads built in Ethiopia with foreign aid are now making it easier for children to get to school, people to reach hospital, and farmers to transport and sell their crops.

But are we giving enough aid?

The short answer is ‘no’ – because rich countries pledged 0.7 per cent of their annual national incomes in foreign aid. And so far, just four nations – Sweden, Norway, Denmark and the Netherlands – have reached the target.

Oxfam is working hard, encouraging governments and international organisations like the UN to meet their promises on aid, and spend it more effectively.

What we are calling for?

Our Health and Education campaign demands that world leaders cancel poor countries’ debts, and increase foreign aid.  We are calling for more and better money to get every child into school, and to ensure everyone has the doctors, clinics and medicines they need when they are sick.

In 1970, rich countries promised to give 0.7% of their income as aid. Only Denmark, the Netherlands, Luxembourg, Sweden and Norway have met this promise.

In 2005, G8 leaders promised to cancel some of the debts of 42 countries, and give an extra £50 billion in aid by 2010 – half of it to Africa. But for the second year in a row, rich countries have not delivered on their commitment to increase their aid to fight extreme poverty.

We are also campaigning in India, to demand that the government delivers the 9% of the country’s income for health and education they have committed.  Children and campaigners there are reminding their leaders that ‘9 is Mine’, and we are campaigning with them. We’re pressing them to make sure they do. And they must act soon.

Read more stories of effective aid in action.