Sao Tome and Principe debt reduction program reached final stage

20 April 2006

Washington, United States, 20 April – the debt reduction program for Sao Tome and Principe is due to be concluded in mid 2006, thanks to the country’s favorable macroeconomic development, the International Monetary Fund (IMF), which is running the program, has said.

In its latest report on the progress of the program for Highly Indebted Poor Countries (HIPC), the IMF said that Sao Tome, like Cameroon and Malawi, “has been satisfactorily implementing economic policy programs,” and is in the final phases of the initiative.

The total amount granted to the archipelago, under preferential conditions, totals US$200 million, in order to assist with debt reduction, according to the latest published figures.

According to the IMF Sao Tome significantly improved its economic performance since 2004, when, “despite the country having kept up to date with its debt servicing to multilateral institutions (…) delayed payments of foreign debts continued to rise.”

The IMF considers that an country can finish its HIPC initiative when the approved plan for reducing poverty is implemented in a satisfactory way for a year and when all defined targets have been met.

In the report published Wednesday, the IMF expects that the debt-reduction plan for Guinea Bissau will be concluded by the last quarter of 2009, due to the “difficulties” the country is having in implementing its macro-economic policies.

Guinea Bissau, the IMF said, “has made efforts to return to growth, recover its public finances and improve governance,” in order to set up conditions for the progress of the IMF program.

Since 2000, Guinea Bissau has received round US$790 million under the terms of the HIPC, to help service its debts.

The HIPC initiative includes 29 countries and so far involves financing of around US$40 billion, provided by Bretton Woods associations, the African development Bank for Economic and Social Development, the Asian Development Bank, the European Union, and the European Investment Bank, amongst others. (macauhub)