Ivory Coast gets over $4b debt relief after completing HIPC process

Ivory Coast has been relieved of its debts by over $4 billion from both the World Bank and the International Monetary Fund (IMF). The debt relief represents more than 24% of the country’s external debts.

The IMF and the World Bank’s International Development Association (IDA) on June 26, 2012 approved $3.1 billion in debt relief for Ivory Coast under the Heavily Indebted Poor Countries (HIPC) initiative.

In addition, the Washington-based lenders also announced a further $1.3 billion debt relief for the world’s leading cocoa producer under the Multilateral Debt Relief Initiative (MDRI).

“The Boards of Directors of both institutions determined the country has made satisfactory progress in meeting the requirements to reach the completion point under the HIPC initiative, the stage at which debt relief becomes irrevocable and at which countries start to benefit from additional multilateral relief (MDRI),” a World Bank statement said.

The statement explained further that the requirements met by Ivory Coast included satisfactory implementation of the Poverty Reduction Strategy Paper (PRSP), the maintenance of a sound macroeconomic policy framework, regular publication of information on public finances, and reform of the governance of the cocoa sector, among others.

Ivory Coast becomes the 33rd country to reach the completion point under the HIPC Initiative. The country started the HIPC process in 2009.

In 1996, the World Bank and IMF launched the HIPC Initiative to create a framework in which all creditors, including multilateral creditors, can provide debt relief to the world’s poorest and most heavily indebted countries to ensure debt sustainability, and thereby reduce the constraints on economic growth and poverty reduction imposed by the unsustainable debt-service burdens in these countries.

Early 2002, the World Bank and IMF announced debt relief for Ghana under the HIPC initiative to the tune of $3.7 billion.

By Ekow Quandzie