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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