Representatives of 11 European governments and the United States announced on September 15 to forgive USD 55.6 million of a total of USD 59.3 million owed by the Central African Republic to these countries from loans given since 1983. The cancelation marks an important step towards improving the CAR government’s standing among creditor countries and investors, and follows shortly after it reached its completion point under the ‘enhanced initiative for Heavily Indebted Poor Countries’ (HIPC) in June 2009. Continue Reading »

(IMF/WB) The International Monetary Fund (IMF) and the World Bank’s International Development Association (IDA) have agreed that the Central African Republic (C.A.R.) has made sufficient progress and taken the necessary steps to reach the completion point under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The C.A.R. becomes the 25th country to reach the completion point under the Initiative.

HIPC debt relief from IDA and the IMF amounts to US$207 million and SDR 17.19 million (US$ 26.77 million) in NPV terms, respectively. In reaching the HIPC completion point, C.A.R. also becomes eligible for further debt relief from the IMF, IDA, and the African Development Fund (AfDF) under the Multilateral Debt Relief Initiative (MDRI). MDRI relief net of HIPC assistance would lead to a nominal reduction of debt owed to IDA and the IMF by US$182 million and SDR 1.9 million (US$ 2.9 million) respectively. At the time of the HIPC decision point, C.A.R.’s debt was an estimated US$583 million in net present value (NPV).

To reach the completion point, the C.A.R. completed a number of measures aimed at preparing and implementing a national poverty reduction strategy and maintaining a stable macroeconomic environment. In addition, the authorities have made good progress in implementing measures in the area of transparency, structural reforms in the forestry and mining sectors, civil service reform, public debt management, social sectors and HIV.

Martin Petri, IMF Mission Chief for C.A.R., noted that “the authorities are to be commended for reaching this important milestone. Despite a difficult post-conflict environment, they have undertaken important reforms to reach the Completion Point for debt relief under the HIPC Initiative. Debt relief will reduce significantly C.A.R.’s debt burden and free up resources to finance spending in areas critical to meeting the Millennium Development Goals.”

“We are very pleased that the Boards of the Bank and the Fund have approved full debt relief for C.A.R. under the HIPC Initiative and MDRI,” said Mary Barton-Dock, World Bank Country Director for CAR. “This confirms C.A.R.’s commitment to improve governance, foster transparency in public finance and debt management, accelerate reforms in the forestry and mining sectors, and strengthen social programs, as reflected in the Completion Point triggers. These reforms are critical for fostering increased economic growth and improved living standards in CAR. My Fund colleagues and I congratulate the C.A.R. authorities on this achievement. At the same time we urge them to maintain momentum toward the goals of their national poverty reduction strategy,” she added.

Click here to read the full IMF press release