Rwanda Reaches Completion Point in HIPC Initiative: Obtains major debt relief from the AfDB
Tunis, 6 July 2005 –The Boards of Directors of the African Development Bank (AfDB) and the African Development Fund (ADF) today agreed that Rwanda had effectively met the conditions and reached the completion point under the enhanced framework of the Heavily Indebted Poor Countries (HIPC) Initiative.
The Bank Group will, as a result, provide debt relief of US$ 224 million in nominal terms. Rwanda will be released from up to 80 percent of annual debt service to the Bank Group until the entire amount is delivered in July 2032.
In reaching their decision, the Boards recognized the fact that Rwanda had satisfactorily implemented reforms agreed to when the country reached the decision point in December 2000. In line with the enhanced HIPC framework arrangements, Rwanda had to fulfill the following conditions to reach completion point:
- Successful implementation of a complete Poverty Reduction Strategy Paper (PRSP);
- Maintenance of macroeconomic stability;
- Satisfactory progress in implementing structural reforms in the tea sector;
- Substantial achievements in social indicators related to education, health, gender equality, and the fight against HIV/AIDS.
The Boards agreed that Rwanda has achieved macroeconomic stability, to a large extent, and established good track record of policy implementation in 2004. Though Rwanda was not able to fully comply with all the triggers with respect to the structural reforms in the tea sector, the Boards noted recent and overall satisfactory progress in the reform of the policy and regulatory framework for tea.
Rwanda has made substantial progress in human development (education and health), governance, and infrastructure development during the period August 2002-June 2003. Rwanda also made progress from June 2003 until 2004 in agriculture productivity, human resource development and health, construction of new roads and bridges, access to and supply of water, and improved environment for the development of the private sector and human capacities.
Rwanda is the 14th Regional Member Country of the Bank to reach completion point under the enhanced HIPC Initiative. Debt relief from the ADB Group to the country since December 2000 when it reached decision point – the first stage in the HIPC process – amounts to over US$ 20 million in nominal terms.