AfDB Approves Debt Relief for Liberia
Tunis, 6 October 2010 – The Boards of Directors of the African Development Bank (AfDB) Group on Wednesday, 6 October 2010 approved a debt relief package for Liberia, noting that the country had effectively met the conditions and requirements under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
Following the approval, Liberia will receive USD 237.2 million debt relief under the HIPC initiative, equivalent to 16.7 percent of all multilateral assistance to the country. In addition, under the MDRI, the African Development Fund will relieve Liberia of its USD 19.56 million debt obligations..
Liberia qualified for HIPC and MDRI debt relief having demonstrated good progress in the preparation and satisfactory implementation of a Poverty Reduction Strategy Paper; maintained macroeconomic stability; strengthened economic governance through improved public financial management and shown a high degree of transparency and accountability in the extractive industries; implemented social sector reforms; and developed and implemented a credible debt management strategy.
The assessment by the AfDB, the International Monetary Fund and the World Bank concluded that with the implementation of these policy measures and reforms, Liberia had fulfilled the agreed requirements to qualify for irrevocable debt relief under the two initiatives.
The Bank Group reengaged with Liberia in 2007 following an internationally coordinated arrears clearance program that led to the normalization of relations after a prolonged period of suspension of operations. Since 2008, the AfDB has been providing development assistance to the country under the AfDB/World Bank Joint Country Assistance Strategy. The Bank Group’s support focuses on rebuilding core state functions and facilitating pro-poor economic growth through improved access to key social and economic services. Institutional capacity development, gender mainstreaming and the environment are also important cross-cutting elements of the strategy. Cumulative AfDB Group commitments since 2008 amount to UA 82.6 million* (equivalent to USD 124.6 million) as of 30 August 2010.
Liberia is the 23rd AfDB regional member country (RMC) to reach the ‘completion point’, the final point in the multi-stage eligibility criteria, under the HIPC Initiative. To date, 30 out of the 33 RMCs potentially eligible for debt relief from the HIPC Initiative and the MDRI, have benefited after meeting the eligibility criteria for decision or completion point assistance.
* 1 UA (Unit of Account) = 1.50891 USD as at 09/2010