March 5, 2003
Finance ministers from Commonwealth African countries participating in the Heavily Indebted Poor Countries (HIPC) Initiative concluded a two-day meeting on 28 February 2003. This third meeting of the Commonwealth HIPC Forum was chaired by Basil Mramba, Minister of Finance for the United Republic of Tanzania.
The ministers, who met in Dar es Salaam, Tanzania, said the Initiative has provided significant debt relief which has released resources for priority expenditure in health and education. Mozambique, Tanzania and Uganda are Commonwealth countries which have completed the HIPC process.
However, ministers pointed out that there are a number of aspects that require further attention to ensure that HIPCs achieve a sustainable exit from their debt as soon as possible.
One of the issues identified was that several smaller creditors were not participating in the Initiative. Ministers called for increased efforts by Commonwealth and non-Commonwealth HIPCs, the World Bank, International Monetary Fund (IMF) and bilateral donors to bring these creditors on board.
They also welcomed the proposal being considered by the World Bank and IMF for an Intra-HIPC Trust Fund, financed by donors, which would address debt between HIPCs.
The challenges faced by countries that have completed the process was also discussed. Ministers called for a flexible approach in increasing debt relief at completion point, which would ensure that such countries maintain their debt at sustainable levels. In a bid to insure HIPC graduates against falling back into unsustainable debt, ministers called on the international community to explore new mechanisms such as a concessional contingency financing facility in the IMF.
The ministers also called for aid, particularly in the form of grants, to be increased and redirected to HIPC countries. They strongly supported the UK Chancellor of the Exchequer's proposal for an International Financing Facility designed to double overseas development assistance to US$100 billion.
Finance ministers or their representatives from Cameroon, Ghana, Malawi, Mozambique, Sierra Leone, Tanzania, Uganda and Zambia attended the meeting, together with representatives of the IMF, the World Bank and other institutions.
The last two HIPC Forums were in London, UK (September 2002) and Lilongwe, Malawi (February 2002).
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