OWN CORRESPONDENT, Washington | Wednesday 8.30pm.
THE World Bank on Wednesday announced an agreement to grant Mozambique $3,7-billion in debt relief from its external creditors.
In terms of net present value, which reflects current interest and exchange rates, the relief is worth $1,7 billion dollars against present value of future debt obligations. The assistance is part of the Heavily Indebted Poor Countries Initiative (HIPC), a joint project of the bank and the International Monetary Fund unveiled in 1996.
The World Bank and the IMF agreed to increase the value of the relief for Mozambique beyond the $2,9-billion, or $1,4-billion in today’s values, which was originally committed in April 1998. The new figure also constitutes the largest debt relief operation under the HIPC initiative and raises the total value of assistance to $5,5-billion, or $2,7-billion in today’s values.
Mozambique is the fourth country to win a firm debt relief commitment from the bank and the Fund. The other three beneficiaries are Uganda, Bolivia and Guyana. The HIPC initiative holds out the possibility of relief to about 40 of the world’s most impoverished nations, provided they agree to implement strict IMF reform measures.
The bank on Wednesday hailed Mozambique for having achieved “impressive results” in its efforts to secure economic stabilization and structural reform. “Market liberalization, completion of an ambitious privatization program, fiscal reform and progress on public sector reform have contributed to strong economic growth, which has averaged more than 8% per year over the past five years,” a bank statement said.
It predicted that Mozambique’s external debt-service obligations would fall to an annual average of $73-million in 1999-2005, compared with an average of $169-million that would have been due without the relief and the $104-million dollars actually paid in 1998.–AFP