Chapter

Progress Made in the HIPC Initiative

Author(s):
Kamau Thugge, and Anthony Boote
Published Date:
December 1999
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On April 22 and 23, 1997, the Executive Boards of the World Bank and the IMF approved Uganda’s eligibility for assistance under the HIPC Initiative. They agreed to an NPV debt-to-exports target of 202 percent for a completion point of April 1998. Based on this, Uganda is expected to receive assistance equivalent to around US$340 million (in April 1998 U.S. dollars), which represents a reduction in Uganda’s debt of 20 percent. The World Bank’s share of this assistance is around US$160 million and the IMF’s share of this assistance is around US$70 million. These amounts will be delivered in April 1998 subject to satisfactory assurances of action by Uganda’s other creditors and Uganda’s continued strong performance under its ESAF- and IDA-supported programs. The resulting total reduction in Uganda’s nominal debt service is likely to be much higher—depending on how the assistance is delivered—at around US$700 million.

In September 1997, the Executive Boards of the World Bank and IMF decided assistance under the Initiative for Bolivia and Burkina Faso. For Bolivia, the Boards agreed to an NPV debt-to-exports target of 225 percent for a completion point of September 1998. Bolivia is expected to receive assistance equivalent to around US$450 million, which represents a reduction of Bolivia’s debt of around 13 percent. The World Bank’s share of this assistance is around US$50 million and the IMF’s around US$30 million; in view of Bolivia’s heavy debt-service burden, both the Bank and the IMF intend to front load use of their assistance. These amounts will be delivered in September 1998 subject to satisfactory assurances of action by Bolivia’s other creditors and Bolivia’s continued strong performance under its ESAF-and IDA-supported programs.

For Burkina Faso, the Boards agreed to a target of 205 percent and a completion point of April 2000 involving assistance of around US$110 million (US$40 million from the Bank and US$10 million from the IMF) representing a debt reduction of around 14 percent. The Boards also decided that the external debt burden of Benin—after the stock-of-debt operation on Naples terms from Paris Club creditors in October 1996—was sustainable without any assistance under the Initiative. The World Bank and IMF Boards have also had preliminary discussions of the eligibility for assistance under the Initiative for Côte d’Ivoire, Guyana, and Mozambique and staff are consulting other creditors of these countries. Côte d’Ivoire and Guyana would qualify for assistance under the Initiative under the fiscal/openness criteria described earlier. The objective is to bring these three countries to their decision points under the Initiative during 1997 or early 1998.

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