Liberia Wins $4.6 Billion in Debt Relief
The IMF and the World Bank decided to support June 29 the final stage of debt relief for Liberia that in total amounts to $4.6 billion in nominal terms.
Debt relief reduces Liberia’s external debt stock by more than 90 per cent to about 15 percent of GDP.
The decision was reached after Liberia met the requirements for achieving the final step, or completion point, under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The IMF’s share of this debt relief amounts to about $730 million in end-June 2007 present value terms—among the largest IMF country commitments under the enhanced HIPC Initiative, representing over one-fifth of the total financial support for the HIPC process.
June 29, 2010
IMF and World Bank announce US $ 4.6 billion Debt Relief for Liberia
The International Monetary Fund (IMF) and the World Bank's International Development Association (IDA) have decided to support US$4.6 billion of debt relief for Liberia, of which US$1.5 billion is to be delivered by multilateral creditors and the remainder by bilateral and commercial creditors. This was made possible in part by the exceptional efforts of members of the international community to finance debt relief for Liberia.
Debt relief under the Enhanced Heavily Indebted Poor Countries (HIPC)
Initiative from all Liberia’s creditors was estimated at US$ 2.7 billion in
end-June 2007 present value terms. Debt relief from the IMF would total US$730
million—the IMF’s biggest ever HIPC contribution for a single country—and from
the World Bank’s IDA, US$374 million.
As a result of this relief, Liberia will no longer face a heavy debt service burden in relation to its revenue and foreign exchange resources.
The Boards determined that Liberia has taken the necessary policy actions to
reach the completion point, and therefore debt relief from both the HIPC
Initiative and MDRI becomes irrevocable. Liberia has successfully implemented
its poverty reduction strategy and maintained a stable macroeconomic
environment, despite the global economic crisis.
The IMF and World Bank on Tuesday cleared Liberia's entry into a global debt relief program, a vital step toward canceling the country's $4.7 billion debts and helping it rebuild from civil war.
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Liberia needs urgent debt cancellation and aid
The Multilateral Debt Relief
Debt Relief Under the Heavily
Indebted Poor Countries (HIPC) Initiative
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