- The Norwegian government today decided on the cancellation of Congo Kinshasa's (DRC) entire debt to the Scandinavian country, totalling kroner 288 million (euro 35 million). The cancellation is to be made in two turns, with more than half of the debt to be erased immediately.
The government decision was made in reference to the debt cancellation programme agreed up by the Paris Club - a grouping of the world's major creditor nations - in November last year. The Paris Club is following up on the Initiative for the "Heavily Indebted Poor Countries" (HIPC Initiative), through which the Kinshasa government has embarked on economic reforms under guidance from the IMF.
Norway forms part of the Paris Club creditor nations and thus formally pledged to cancel the Congo's debt already last year. The Paris Club members at their November meeting with Congolese government representatives however also urged other creditor nations to reach similar agreements with the Congo.
The Norwegian government today in a cabinet meeting decided upon cancelling the Congo's total debt to the country in two turns. As of today, a total of kroner 166 million (euro 20 million) have been erased from this debt.
- After this, Congo Kinshasa has a remaining debt of kroner 122 million [euro 15 million] to Norway, according to a statement released by the Norwegian Ministry of Foreign Affairs today. "This remaining debt will be cancelled as soon as the country has fulfilled its HIPC obligations, as expected in 2006," the statement adds.
According to the Oslo Ministry, the Norwegian government will cancel this debt without influencing its development aid budget, following its own action plan for debt cancellations for developing countries. "The debt cancellation therefore will not produce cuts in other development aid for poor countries but come in addition to this aid," the statement said.
According to the Paris Club, the Congo has reached an agreement of cancelling a total of US$ 8,980 million (euro 7,352 million) with its principal creditors. This debt cancellation will be done over time, as the Congo lives up to its HIPC obligations.
The creditors constantly stress the importance they attach to "the continued satisfactory implementation of the Congo's economic programme and its poverty reduction strategy," according to the Paris Club. The Kinshasa government is obliged to fulfil wide-ranging reform programmes, including economic liberalisation and privatisation, to complete its HIPC programme.
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