- Senegal was today granted a US$ 850 million debt service relief by the International Monetary Fund (IMF) and the World Bank. More is likely to follow soon. The two institutions agree that Senegal now fulfils the demands for such debt release due to "political stability" and "broad ranging structural reforms," including privatisation and deregulation of the economy.
According to a statement issued today by the IMF, the two agencies had "agreed that Senegal has taken the necessary steps" to reach the so-called "completion point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative," meaning that the IMF and World Bank now must complete their debt relief programme for Senegal. Senegal becomes the 12th country ever to reach this point.
Total debt relief under this initiative from all of Senegal's creditors amounts to US$ 850 million in nominal terms. This assistance is equivalent to a reduction in net present value terms of US$ 488 million as agreed at the decision point, which now becomes irrevocable. This debt relief is provided by multilateral creditors, industrialised countries and the IMF/World Bank.
In addition, many creditors of the so-called Paris Club of industrialised countries have indicated their intention to provide additional relief beyond the HIPC Initiative. This is estimated to total about US$ 400 million, according to information from the IMF. Senegal could thus receive debt service relief totalling us$ 1.2 billion.
Given this large reduction, the IMF holds that Senegal now should be in a significantly improved position to service its national debt. The current debt relief, together with other assistance, "will lower Senegal's debt-to-export ratio to 116 percent, and its debt-to-revenue ratio to 157 percent," the Fund holds.
Over the long run, Senegal was now set to achieve "significantly improved chances to achieve and maintain sustainable debt levels," the IMF said. "Provided Senegal adheres to sound macroeconomic policies, persists with its reform strategy and secures borrowing predominantly on highly concessional terms, the debt ratios after the provision of enhanced HIPC assistance should continue to improve steadily."
The IMF statement also detailed the reasons for the decision to complete Senegal's debt relief programme at this moment. "Senegal is politically stable," the Fund observed, referring to the "smooth transition of power after the 2000 presidential election," when opposition leader Abdoulaye Wade came to power.
- In recent years, the authorities have implemented stability-oriented macroeconomic policies and broad ranging structural reforms, the statement added. "The regional central bank's monetary policy has secured price stability and the authorities' prudent financial policies have strengthened Senegal's fiscal position."
Senegal's structural reforms have included measures that have reduced the role of the state in the economy, improved the business environment, promoted trade and strengthened public sector performance. The government of President Wade has led Senegal on a road to controversial privatisation of state companies, strictly following IMF and World Bank recipes.
- These policies have contributed to strong sustained growth and poverty reduction over the past decade, the IMF claims. "Since 1994, Senegal's real GDP growth has averaged 5 percent, resulting in GDP per capita growth of over 2 percent during this period, in sharp contrast to the preceding decades after independence, when GDP per capita fell," the Fund adds.
afrol News - It is called "financial inclusion", and it is a key government policy in Rwanda. The goal is that, by 2020, 90 percent of the population is to have and actively use bank accounts. And in only four years, financial inclusion has doubled in Rwanda.
afrol News - The UN's humanitarian agencies now warn about a devastating famine in Sudan and especially in South Sudan, where the situation is said to be "imploding". Relief officials are appealing to donors to urgently fund life-saving activities in the two countries.
afrol News - Fear is spreading all over West Africa after the health ministry in Guinea confirmed the first Ebola outbreak in this part of Africa. According to official numbers, at least 86 are infected and 59 are dead as a result of this very contagious disease.
afrol News - It is already a crime being homosexual in Ethiopia, but parliament is now making sure the anti-gay laws will be applied in practical life. No pardoning of gays will be allowed in future, but activist fear this only is a signal of further repression being prepared.
afrol News / Africa Renewal - Ethiopia's ambitious plan to build a US$ 4.2 billion dam in the Benishangul-Gumuz region, 40 km from its border with Sudan, is expected to provide 6,000 megawatts of electricity, enough for its population plus some excess it can sell to neighbouring countries.
front page
| news
| countries
| archive
| currencies
| news alerts login
| about afrol News
| contact
| advertise
| español