October 24, 2004
The Paris Club of rich lending nations has agreed to cancel $758 million (£419 million) of Ethiopian debt to help end poverty and promote growth in the country. The write-off is part of the Heavily Indebted Poor Countries (HIPC) initiative to reduce the debt of the world’s poorest nations.
Ethiopia’s debts were estimated to be $6.8 billion by the International Monetary Fund in 2003.
Ethiopia says it pays up to $100 million a year in servicing what it owes.
The Paris club said Ethiopia’s outstanding debt now stands at $153 million.
Hard-hit by drought, famine, epidemics and wars, Ethiopia remains one of the poorest countries in the world
African Development Bank
“Paris Club creditors welcomed Ethiopia’s determination to implement a broad-based and rigorous economic programme which should provide the basis for sustainable economic growth,” the organisation said in a statement.
Australia, Austria, Belgium, Finland, France, Germany, Italy, Japan, the Netherlands, the Russian Federation, Sweden, the United States and Britain agreed to the deal.
The African Development Bank has also pledged to cancel $339 million of Ethiopian debts, a report on the UN’s news website, IRIN, said.
“Hard-hit by drought, famine, epidemics and wars, Ethiopia remains one of the poorest countries in the world,” the African Development Bank has said.