G8 ministers back Africa debt deal
 |  Brown announces the African debt relief deal Saturday in London. |
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 President Bush announces he'll give $674 million in aid to Africa.
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LONDON, England -- Finance ministers from the world's wealthiest nations have agreed to a historic accord to cancel up to $55 billion worth of debt owed by the world's poorest nations.
The Group of Eight (G8) ministers -- meeting for a second day Saturday in London -- backed a deal that calls for an immediate scrapping of 100 percent of the debt owed by 18 countries.
Those countries -- many in sub-Saharan Africa -- owe about $40 billion to the World Bank, the International Monetary Fund and the African Development Bank.
The G8 ministers also said 20 other countries could be eligible for debt relief if they meet targets for good governance and tackling corruption -- bringing the total package to more than $55 billion.
British Finance Minister Gordon Brown called the accord a "new deal" for relations between the rich and the poor countries.
"What we have decided today, conscious of the poverty that we face, is a decision of 100 percent debt cancellation for the poorest countries backed up by greater trade justice, by a doubling of European aid, by a commitment to provide AIDS treatments for people by 2010," said Brown.
Finance ministers from the United States, Britain, Japan, Canada, Russia, Germany, Italy and France agreed to the package ahead of a G8 summit July 6-8 in Gleneagles, Scotland. (Special report).
Hopes of an accord on debt relief were raised Friday with reports of an agreement between the United States and Britain on writing off debt owed by the 18 countries. (Full story)
The countries are Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia.
Sub-Saharan Africa owe about $68 billion to international lending agencies.
Saturday's accord is aimed at helping countries free up funds used for debt repayment in redirect the money to health care, education and other needs. One of the major issues that these countries face is the AIDS crisis.
"A real milestone has been reached," U.S. Treasury Secretary John Snow told reporters.
"Lifting the debt burden from the poorest countries in the world brightens their prospects enormously. This is an achievement of historic proportions."
He also said "we did that because as we looked at the situation, there was something fundamentally wrong about this cycle of lend and forgive, lend and forgive, which had borne down upon the poorest countries for decades."
The agreement was greeted with less enthusiasm by some.
Stephen Rand, of the Make Poverty History campaign, said this is "good news, but more needs to be done."
"This is some of the debts of some of the world's poorest countries. And we have been campaigning for that 100 percent to be 100 percent of all the debts of all the world's poorest countries," Rand said.
Make Poverty History is a coalition dedicated to the eradication of poverty
British Prime Minister Tony Blair -- current G8 president -- had demanded that poor countries' debts be cancelled and their aid doubled.
The debts would be written off by the lenders in an effort to allow the debtor countries to start fresh, get their books in order and eventually be able to borrow again for economic development, health, education and social programs, rather than simply to repay existing loans.
The G8 ministers discussed other issues Saturday, including concerns about the effect of high oil prices on the global economy, U.S. deficits, reform of Japan's financial sector and poor economic growth in European.
Chinese officials have been included in order for U.S. and European ministers to urge them to the float the yuan, which many see as being overvalued, leading to floods of cheap imports.
Snow is urging his Chinese counterpart Jin Renqing to scrap the yuan's exchange rate peg to the U.S. dollar.
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Associated Press contributed to this report.
