The Channel 4 programme about Niger, its debt burden and diseased and dying children, was as good a polemic against crippling debt as you'll see. It was clever to focus on a small number of poor people and frustrated doctors, not uncountable masses. The suffering Africans also spoke, and we read their words, which frequently doesn't happen in such reports.

One thing it did not explain was debt itself. The bad effects of debt servicing were emphasised, as was the policy of adherence to World Bank-promoted belt-tightening. But there was no mention of what the original debt was for, nor was there any effort to get inside whatever rationale the World Bank could possibly have had for knowingly prolonging human suffering. The strange thing is that the World Bank says:

"The main objective of the World Bank's assistance to Niger is to reduce poverty. A sustained reduction in the number or even proportion of poor is attainable in the long run if major human capital investments, further economic integration with the coastal countries, and improved management of water resources are realised."

This is laudable, even if "in the long run" seems heavily ironic, given mortality rates in Niger.

The disagreement is over debt - whether it should be repaid, rescheduled, reduced or forgiven. There is no current prospect of Niger's entire debt being written off within the current policy framework, unless a bold decision is taken by the major economies behind the World Bank and IMF. There is some hope that the Jubilee 2000 campaign for debt forgiveness will produce significant write-offs, if not a wipe-out.

The question would then be posed, should Niger or any other very poor country ever borrow again? The waste of time and resources in sorting out rescheduling of debts goes to the heart of what debt is, and leads to one answer only - no.

In corporate finance, we are taught that a debt incurred by a company is the same as the lender giving the company the option to sell the assets of the company to the lender for the value of the loan. If the assets fall below the loan value, the company can choose to default.

It's the same as the familiar "handing the keys back to the bank" in a mortgage. If the house value falls below the loan value, some borrowers just hand the house to the bank, rather than continue mortgage repayments. Of course, difficulties arise if you do this, but the theory is that a debt contains what's called an embedded option.

There is no option to sell assets in unsecured lending. Nor can there be any real option over assets where the borrower is a sovereign state, and the loan is backed by "the full faith and credit of the government of" Niger, for example. There is always an ability to default, as Russia so spectacularly showed. In that scenario, lenders can't take over an entire country or its right to levy tax.

Of course, the allegation is that that is exactly what the IMF, World Bank and commercial banks do, despite the World Bank's use of that word "partnership". The political problems that the perception of a loss of sovereignty to foreigners - from German first World War reparations to present-day Russian extreme nationalism - can be devastating. We too were once frightened by what our foreign creditors might do.

To make or accept large amounts of unsecured loans involves inordinate risks and moral hazards. Poor and/or risky sovereign states should avoid foreign debt. They should not risk their peoples becoming indentured servants of lenders, or even risk their peoples' perception of such. Rich countries, multilateral agencies and commercial banks should simply not lend to poor sovereigns. The political risks of trying to recover value after a default are unacceptable, and the moral basis is too flimsy.

If we want to help, let us give freely our money, our expertise and our resources. If we want a business proposition, let us take equity risk. If we want a commercial loan proposition, let us look elsewhere than poor countries. The nature of debt itself supports debt forgiveness for poor countries.

Oliver O'Connor is an investment funds specialist