- Togo has been approved for debt relief under enhanced Heavily Indebted Poor Countries, after reaching a decision point under the initiative.
The statement by the International Monetary Fund said Togo will receive interim debt relief from certain creditors as a result.
However, the fund's board said in order for Togo to qualify for irrecoverable relief, it is expected to prepare a Poverty Reduction Strategy Paper and satisfactorily implement it for a year and implement broad reforms to show commitment to poverty reduction.
The IMF statement further said Togo will have to implement key structural and social reforms, including in the areas of economic governance and debt management, under IMF and IDA-supported programmes anchored in the government's Poverty Reduction Strategy.
"In addition to HIPC debt relief, Togo will access relief under the Multilateral Debt Relief Initiative when it reaches the HIPC completion point. This will further increase the resources available to the government in order to reduce poverty," the statement said.
The IMF Deputy Managing Director Takatoshi Kato said Togo has made significant progress on political and economic reforms, and has regularised its relations with key development partners.
"Performance under the new IMF's Poverty Reduction and Growth Facility arrangement has been commendable, despite the adverse impact of global price volatility and recent heavy flooding in Togo," he said.
He however said external conditions are likely to remain challenging owing to the global downturn caused by the financial crisis, further stating that macroeconomic stability, supported by sound fiscal policies and important public financial management reforms, has enabled Togo to reach the decision point for debt relief.
"Prudent macroeconomic policies, sound debt management, the delivery of HIPC and MDRI debt relief, and a further increase in concessional donor support will be critical for achieving debt sustainability and setting the conditions for higher economic growth and a reduction in poverty," the IMF statement said.
The World Bank Country Director for Togo Madani M. Tall, also added: "We are happy that Togo has moved rapidly to the Decision Point following re-engagement with key donors."
He said Togo is expected to rapidly meet the requirements for the Completion Point so as to benefit from the full debt relief programme.
Under the HIPC programme, Togo is continuing its commitment to improve governance, strengthen debt management capacity, foster transparency in public financial management and strengthen social sector programmes, as reflected in the completion point triggers.
Togo is among the poorest countries in the world, with a gross national income (GNI) per capita of US$360 in 2007.
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