Senegal Reaches Completion Point in HIPC Initiative: Obtains major debt relief from the AfDB
The Bank Group will, as a result, provide irrevocable debt relief of US$ 56.80 million in net present value (NPV) terms to the country. Senegal will be released from up to 80 percent of annual debt service to the Bank Group until the entire amount is delivered sometime in 2006.
In reaching its decision, the Boards recognized the fact that Senegal had satisfactorily implemented reforms agreed to when the country reached the decision point in June 2000. In line with the enhanced HIPC framework arrangements, Senegal had to fulfill the following conditions to reach completion point:
- Completion of the Poverty Reduction Strategy Paper (PRSP);
- Maintenance of a stable macroeconomic environment in line with IMF-set targets;
- Implementation of fiscal and structural reforms in social services and state-owned enterprises;
- Achievement of key social objectives, particularly in health and education.
The Boards agreed that performance under the new IMF Poverty Reduction and Growth Facility (PGRF) arrangements, approved in 2003, had been satisfactory and most of the policy reforms agreed to at the decision point had been implemented. They noted that financial policies have been prudent and the pace of structural reforms satisfactory.
The government had increased its education budget, from 40 percent in 1998 to 44 percent in 2003, and continued to employ teachers on contract at an average of 3,800 per year between 2000 and 2003. In health, the proportion of pregnant women receiving prenatal care in the country continued to increase from 56 percent in 1999 to 82 percent in 2001 and 2002, more than the set target.
Senegal is the 9th 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 June 2000 when it reached decision point – the first stage in the HIPC process – amounts to US$ 56.00 million in 1998 NPV terms or over US$ 65.4 million in nominal terms.