Burundi Reaches Decision Point in HIPC Initiative
Obtains major debt relief from the ADB
Tunis, 24 November 2005 – The Boards of Directors of the African Development Bank (ADB) and the African Development Fund (ADF) today agreed that Burundi had effectively met the conditions and reached the decision point under the enhanced framework of the Heavily Indebted Poor Countries (HIPC) Initiative.
The Bank Group’s share of debt relief will amount to US$ 149.35 million in Net Present Value terms (US$ 226.01 million in nominal terms), which is equivalent to about 21 percent of the multilateral creditors’assistance, and about 18 percent of total assistance from all creditors. This amount will save up to 90 percent of Burundi’s debt service obligations annually until February 2043.
|Creditors||Total||Percent of multilateral debt relief assistance||Percent of total debt relief from all creditors|
|1- Bilateral Creditors||124||15|
|2- Multilateral Creditors||701||100||85|
|Total Debt Relief||826||100.0|
Burundi qualified for HIPC debt relief after having demonstrated good progress in stabilizing its economy and continuously implementing sound policies for macro economic and financial stability, growth and poverty reduction.
To reach decision point, the government had to fulfill three key conditions:
- Be a Category A (ADF-only) country, with low per capita income, and with evidence of widespread poverty;
- Demonstrate continued maintenance of macroeconomic stability, social and structural reforms as evidenced by satisfactory performance of an arrangement under the International Monetary Fund’s Poverty Reduction and Growth Facility (PRGF);
- Show evidence of making progress in the political and security situation of the country, and consolidating the peace process.
The Boards of the ADB and ADF noted that although Burundi still faces a fragile political and socio-economic situation, the country has made significant steps forward in stabilizing the economy, implementing financial and structural reforms and initiating the restoration of social services.
Burundi is the 24th Regional Member Country of the African Development Bank to reach decision point under the enhanced HIPC Initiative.