The International Monetary Fund (IMF) and the World Bank’s International Development Association (IDA) agreed that Chad has reached its completion point under the enhanced framework of the Heavily Indebted Poor Countries (HIPC) Initiative. In a statement release on April 29th, the two institutions have announced that they have approved a debt relief of $ 1.1 billion for President Idriss Deby’s country.
“The IMF and the World Bank, decided to grant a debt relief of $ 1.1 billion, of which $ 1 billion is expected to be offered by multilateral creditors and the remainder by bilateral and commercial creditors “, said the two institutions in a statement.
The boards of directors of both institutions have established that “Chad had made satisfactory progress in meeting the conditions required to reach the completion point of the initiative for Heavily Indebted Poor Countries (HIPC), stage to which debt relief under this initiative becomes irrevocable and the country is eligible for the multilateral debt relief initiative (MDRI).”
The debt relief provided under the HIPC Initiative by all creditors of Chad was estimated at $ 170.1 million in present value to the end of 2000. The debt relief granted by the IMF would reach 18 million dollars and that granted by IDA, $ 68.1 million. After reaching the HIPC completion point, Chad also became eligible for a reduction of the nominal debt service from IDA ($ 509 million) and the African Development Fund ($ 236 million) to MDRI.
“For Chad, reaching the completion point of the HIPC initiative is a result and an important step. This reflects the considerable improvement of economic management in recent years, “said Mauricio Villafuerte, IMF Mission Chief for Chad.
“Chad will be able to allocate more resources to reduce poverty and promote economic growth. After the completion point, it will remain crucial to pursue sound macroeconomic management to take full advantage of the debt relief, “he added.
Chad is the 36th country to reach the completion point of the HIPC initiative.
The HIPC Initiative was launched in 1996 to help the poorest and highly indebted countries, mostly African, to reduce the burden that excessive debt places on economic growth. The MDRI was created in 2005 to enable beneficiaries to provide additional resources to help countries achieve the Millennium Development Goals (MDGs) set by the United Nations.