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The
International Monetary Fund (IMF) and World Bank's
International Development Association (IDA) agreed this week to
support Benin’s debt relief for approximately
$460-million.
The World Bank reports that Benin has taken the steps necessary to
reach its completion point under the enhanced Heavily Indebted Poor
Countries (HIPC) Initiative.
Debt relief under the enhanced HIPC Initiative from all of
Benin’s creditors will amount to approximately $460-million
over time. Benin becomes the eighth country to reach its completion
point under the enhanced framework of the HIPC Initiative, joining
Bolivia, Burkina Faso, Mauritania, Mali, Mozambique, Tanzania and
Uganda.
The International Development Association (IDA) will provide debt
relief under the enhanced HIPC Initiative amounting to a total of
$124-million in debt service relief, to be delivered through a 50
percent reduction in debt service on IDA credits from 2000 through
2014.
The IMF will provide debt relief of approximately $28,5-million,
which will be delivered through a 32 percent reduction in debt
service until 2007. The remaining creditors are also now expected
to provide their share of relief required under the Enhanced HIPC
Initiative.
"Benin’s HIPC completion point reflects the
Government’s strong track record of reform", said Antoinette
Sayeh, World Bank Country Director for Benin.
"Resources made available under the HIPC Initiative have been used
to commendable effect in education, health, the fight against
HIV/AIDS and rural water and sanitation."
In recognition of the government’s satisfactory progress in
implementing sound macroeconomic and structural policies, under the
enhanced HIPC Initiative, Benin's total external debt is to be
reduced by approximately 31 percent in net present value terms.
Debt service payments for Benin will be cut by more than a third
over the next decade.
"This debt relief, together with the government’s commitments
to structural reforms and macroeconomic stability, provide Benin
with a sound basis for future pro-poor growth in the country,"
according to Pierre Ewenczyk, IMF Mission Chief for Benin.
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