IMF approves foreign debt pardon for Guinea Bissau

16 December 2010

Washington, USA, 16 Dec – The International Monetary Fund (IMF) Tuesday in Washington agreed to pardon a debt owed by Guinea Bissau, in a decision that still needs to be ratified by the World Bank.

The IMF’s executive commission agreed in principle as it considered that Guinea Bissau had “taken the necessary steps,” to conclude the initiative for highly indebted poor countries (HIPC), the Fund said in a statement.

The debt pardon depends on a similar decision from the executive council of the World Bank’s International Development Association, which is expected on 16 December, after which the two institutions will issue a joint statement.

Guinea Bissau’s foreign debt is calculated at US$1.5 billion and since 2001 the country has, unsuccessfully, tried to fulfil criteria to benefit from a debt pardon.

According to the United Nations, Guinea Bissau’s debt pardon could total around half of that amount, or around US$700 million.

In the same statement the IMF said that it had concluded the initial analysis of Guinea Bissau’s economic performance under the terms of the Extended Credit Facility, having approved an immediate pay out of US$3.71 million, thus increasing the amount paid out so far to US$15.83 million. (macauhub)