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$8.5bn debt relief for Africa
20/04/2006 12:07 - (SA)
Cape Town -The Board of the African Development Bank (AfDB) has approved financing for debt cancellation of US$8.54bn for 13 African countries under the Multilateral Debt Relief Initiative (MDRI), the multilateral development finance agency announced on Thursday.
The countries involved are: Benin; Burkina Faso; Ethiopia; Ghana;
Madagascar; Mali; Mozambique; Niger; Rwanda; Senegal; Tanzania; Uganda; and Zambia. The 13 qualified after having reached completion of the enhanced Highly Indebted Poor Countries (HIPC) initiative.
Mauritania will also qualify after satisfying criteria on public expenditure management reforms.
The aim of the MDRI is to assist eligible countries in making progress towards achieving the Millennium Development Goals (MDGs), while preserving the long-term financing capacity of the AfDB's African Development Fund, from which the funds are being sourced.
In a statement, the AfDB said this was a significant step forward in the implementation of the initiatives by donor countries on the issue of debt.
"It expands fiscal opportunities for countries to increase expenditure on reducing poverty and promoting economic growth. Beneficiary countries of the debt cancellation are strongly urged to fulfill their commitments, to pursue economic reforms, prioritise expenditures and adopt forward looking debt
management strategies that ensure non-accumulation of unsustainable debt in the future."
The AfDB noted that it was of critical importance for the
countries to sustain and deepen their efforts at promoting good governance, accountable and transparent use of resources, and a clear political commitment to fight corruption and other forms of abuse of public office.
"The Board's decision is the culmination of an extensive and historic process of consultations with shareholders and donors about the Multilateral Debt Relief Initiative and its implementation", said Donald Kaberuka, President of the AfDB Group.
At the Gleneagles Summit in July 2005, leaders of the G-8 group of eight most developed countries pledged to cancel 100% of the claims due to the International Development Association (part of the World Bank), the African Development Fund (part of the AfDB), and the International Monetary Fund (IMF) of countries reaching the completion point under the enhanced HIPC initiative.
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