- Rwanda's mayor creditor countries have agreed on cancelling 100 percent of the country's remaining debt to them. This currently amounts to a total of over US$ 90 million, according to a statement relased by the so-calld "Paris Club" today.
The Paris Club - which is an informal group of creditor governments from major industrialised countries - today announced it had met on 10 May to discuss Rwanda's remaining debt to these countries. The representatives of these creditor countries had agreed "to recommend to their governments a cancellation of Rwanda's stock of debt."
This, according to the statement released today, ment a recommendation to "canel 100 percent of Rwanda's debt" to these major creditor countries. The decision was part of the enhanced Initiative for the Heavily Indebted Poor Countries (HIPC), which is a programme led by the International Monetary Fund to cancel the debt of poor countries following the Fund's economic reform recommendations.
According to the statement, the representatives had decided to cancel US$ 82.7 million of Rwanda's in nominal terms, which represents the Paris Club share of the HIPC effort. The debt of Rwanda towards Paris Club creditors would be further reduced by US$ 7.7 million in nominal terms "as a result of additional debt relief granted by creditors on a bilateral basis," the statement said.
This sums into a total debt relief of US$ 90.4 million. While this amount is modest, it comes as an addition to earlier debt relief programmes under the HIPC effort. "With the additional bilateral cancellation, the entire debt of Rwanda towards Paris Club creditors will be cancelled," the statement noted.
Post-genocide Rwanda during the last decade has strictly followed the IMF's economic prescriptions towards povrty reduction and economic growth and has seen major development being realised. The Paris Club representatives thus today welcomed "Rwanda's determination to implement a comprehensive poverty reduction strategy and an ambitious economic programme providing the basis for sustainable economic growth."
These Rwandan efforts had led to succeding debt relief pledges from the Paris Club and other major creditors. Rwanda, the statement said, "is committed to devote the resources freed by the present treatment to priority areas identified in the country's poverty reduction strategy and to seek comparable treatment from all its other external creditors." Further debt relief therefore made sence.
Rwanda's public debt was estimated to be US$ 1572,5 million in face value as at end 2003, according to the IMF. The debt owed to Paris Club creditors as of end March 2005 was estimated to be US$ 90.4 million in face value. EU loans are included in this treatment.
As in any Paris Club agreement, the Rwanda representative to the meeting, Finance and Economy Minister Donald Kaberuka, agreed to seek comparable treatment from non-Paris Club creditors and commercial creditors. Minister Kaberuka had indicated Rwanda's willingness to meet these creditors soon in order to negotiate the terms of a future treatment, the statement said.
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