Good Governance Earns Country More Debt Relief
|
|
The island nation of Sao Tome and Principe, just off Africa’s west coast, has earned itself further debt relief by, amongst others, exercising good governance and maintaining a stable economy. Sao Tome originally benefited from U$ 200 million in debt relief in December 2000 under the Highly Indebted Poor Countries (HIPC) program, which helped bring down the country’s U$ 300 million debt burden. In August 2005, Sao Tome signed on to a new 3-year International Monetary Fund (IMF) Poverty Reduction and Growth Facility program worth U$ 4.3 million Last week, the World Bank’s International Development Association (IDA) and the IMF agreed the country had made good progress to reach the completion point under the Enhanced HIPC initiative. “To reach the completion point, Sao Tome and Principe met all the triggers aimed at maintaining macroeconomic stability, ensuring commitment to the national poverty strategy, strengthening public expenditure management, raising the quality of education, improving health outcomes and fighting malaria,” the World Bank said. In addition Sao Tome and Principe took steps to improve governance, especially in its emerging petroleum sector, and to fight corruption through an on-going comprehensive judicial, administrative reform. It becomes the 22nd country to reach the completion point under the initiative. Debt relief under the Enhanced HIPC Initiative from all of Sao Tome and Principe’s creditors amounts to U$99 million in net present value (NPV). In addition, a topping up of enhanced HIPC assistance was approved in an amount equivalent to U$25 million in NPV terms, as of the Completion Point. Total assistance under the Enhanced HIPC Initiative, including topping-up, is estimated to correspond to approximately US$263.46 million in nominal terms, said the Bank. Marie Francoise Marie-Nelly, World Bank Acting Country Director for Sao Tome and Principe, noted that “reaching HIPC Completion Point was a key milestone for the country which will have an important development impact as the funds that would have been used for debt servicing could now be deployed for poverty reducing expenditures.” |