afrol News, 24 May - The government of São Tomé and Príncipe must be brimming with joy over the news that Paris Club has agreed to write off 100 percent of the country’s debts.

This was agreed at a meeting of the representatives of the club’s creditor countries today after it was realised that Sao Tome and Principe has reached its completion point under the enhanced initiative for Heavily Indebted Poor Countries (HIPC) in March 2007.

In a news dispatch, Paris Club expressed its confidence in the country’s “determination to implement a comprehensive poverty reduction strategy and an ambitious economic programme providing the basis for sustainable economic growth.”

As a way of contributing to the restore the debt sustainability of Sao Tome and Principe, Paris Club creditors decided to “write off US $23.9 million in nominal terms, representing the Paris Club's share of the effort in the framework of the enhanced HIPC Initiative, thus reducing to US$ 0.6 million in nominal terms the debt owed to Paris Club creditors by São Tomé and Príncipe.”

The club creditors also committed on a bilateral basis to grant additional debt relief to the country, leading to a full cancellation of the Democratic Republic of São Tomé and Príncipe debt towards them.

São Tomé and Príncipe officials have been praised for their commitment to allocate the resources freed by the present treatment of the debt to priority areas identified in the country’s poverty reduction strategy.

São Tomé and Príncipe's public external debt was estimated to be US$ 294 million in nominal value as at end 1999.

By staff writer

© afrol News

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