Ghana completes debt initiative

Pittsburgh, July 13 - The International Monetary Fund and the World Bank's International Development Association said Ghana has reached completion under the enhanced Heavily Indebted Poor Countries Initiative, according to a news release.

Total debt relief under the enhanced HIPC Initiative from all of Ghana's creditors is $3.5 billion. This assistance is equivalent to a reduction in net present value of $2.2 billion, the release said.

The World Bank will provide $1.4 billion in debt relief under the enhanced initiative. The IMF will provide $112 million in debt relief on payments due during 2002 to 2009.

The remaining bilateral and multilateral creditors are also expected to provide their share of relief required under the initiative, according to the release. Many bilateral creditors also intend to provide an additional $500 million in relief beyond the initiative.

Ghana will save about $230 million annually in debt service costs between 2004 and 2013.

The fund said following the implementation of prudent fiscal and tight monetary policies in recent years, Ghana has achieved a fairly stable macroeconomic environment and has made a robust recovery, however the challenge of achieving long-term debt sustainability and sustained growth will require continued reforms and fiscal vigilance.

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