AfDB, Togo Commence Debt Cancellation Process

17/04/2008
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AfDB, Togo Commence Debt Cancellation Process

Tunis, 17 April 2008 – Senior officials of the African Development Bank (AfDB) Group led by the Vice President for Country and Regional Operations and Policy, Joseph Eichenberger and a Togolese delegation led by the Minister of Finance, Adji Ayassor, signed an Aide Memoire in Tunis on Tuesday, outlining modalities for the clearance of the country’s debt to the Bank Group within the framework of the Fragile States Facility (FSF) approved by the Board on 28 March 2008.

The document is considered to be a major step in the ongoing dialogue with Togolese authorities following the accumulation of the countries’ arrears with the Bank since 2001. The two parties exchanged letters of understanding in 2006 and 2007 culminating in the official visit to the country by AfDB President Donald Kaberuka in February of this year.

This visit gave the AfDB President an opportunity to reiterate the Bank Group’s commitment to support Togo in its efforts to normalise socio-political and economic life since the signing of the Global Political Agreement (GPA) in August 2006.

During his consultations with the country’s most senior officials, Mr. Kaberuka discussed prospects for renewed cooperation, particularly through the Fragile States Facility (FSF), a new mechanism put in place by the Bank Group designed to provide additional financial resources to fragile States in Africa.

Commenting on Tuesday’s Aide Memoire, Mr. Eichenberger noted that negotiations between the Bank and Togo, along with other multilateral institutions have been positive and constructive adding that prospects of the parties reaching and early consensus was good.

For his part, the Togolese Minister of Finance stated that parallel talks were underway between Togolese officials and senior staff at the World Bank and the IMF so as to relaunch financial support during 2008.

The Bank Group’s operations in Togo began in 1972. The institution has to date approved 27 operations for the country (24 projects and 3 studies), bringing total commitments to nearly US$ 270 million. These commitments cover loans granted from the resources of the ADB window (14%), concessional loans from ADF resources (82%) and the Nigeria Trust Fund (4%).

Currently, the Bank Group’s Portfolio in Togo comprises one active project – the Institutional Capacity Building Support Project of US$ 3.3 million approved in 2006, which aims at strengthening the capacities of the Ministry of Finance.