Algeria in race to clear debt
2006-08-27 18:01
Algiers - Algeria is repaying its foreign debt at an increasingly rapid rate due in large part to a massive increase in oil revenues.
Its $7.9bn slate with the Paris Club of creditors countries is almost wiped clean through early debt repayment, with about $950m still owing to Germany and the United States.
On Sunday, Finance Minister Mourad Medelci signed an accord with the German embassy to reimburse ahead of schedule $387m of a total debt of $759m.
That leaves another $372m to repay to Germany and $575m still owed to the United States.
Algiers also plans to pay off money owed to the London Club and other foreign financial institutions such as the World Bank and the African Development Bank.
Algeria has accelerated its early debt repayment thanks to sky-rocketing oil revenues, up from $17bn in 2001 to $66bn at the end of May this year.
Algeria's foreign debt is due to be slashed by two-thirds this year. It stood at $15.5bn at the end of February and diminished to $10bn at the end of June. It should only be $5bn at the end of 2006, Medelci said.
Oil prices have doubled in the last two years, reaching a record high of $78.64 a barrel on August 7 due to strong world demand.
Algeria belongs to the Organisation of the Petroleum Exporting Countries, the 11-member cartel that produces about 40% of the world's oil market.
It pumps approximately 1.3 million barrels of oil per day, well in excess of its Opec quota of 894 000 barrels.