The Times of Zambia (Ndola)
Times Reporter
4 November 2003
The United States government has cancelled $34 million of Zambia's $500 million debt.
US ambassador to Zambia Martin Brennan announced this yesterday in Lusaka at a signing ceremony with Finance and National Planning Minister Ng'ande Magande.
Mr Brennan reaffirmed his government's commitment to cancel 100 per cent of the remaining debt and added that the US would lobby other donor countries to cancel some of Zambia's debts.
He said it was unfortunate that countries that had accumulated huge debts were still being allowed to accrue more instead of cancelling some of the debts to allow them address important issues such as the fight against HIV/AIDS.
Mr Brennan said funding to address the AIDS pandemic would increase in the next two years.
He called on the Government to link debt relief to addressing economic reforms citing the education, health, and the manufacturing industries.
Mr Magande said the debt cancellation arose from the agreement of the provisions of the September 2002, 8th Paris Club meeting of creditor countries.
He said the country reached the decision point in December 2000 and qualified for debt relief from its cooperating partners under the Highly Indebted Poor Countries (HIPC) initiative.
He said the total debt relief available for the entire HIPC initiative from the Paris Club participating creditors as contained in the decision point document was $1,088 million.
Mr Magande said the participating creditors pledged to deliver a total of $3.8 billion debt relief to Zambia once it reached the HIPC completion point.
Mr Magande also acknowledged that the criteria used to arrive at the $3.8 billion for debt relief were relevant at that time.
"It is unfortunate that I have to report that the original criteria used to make forecasts with regard to the future economic and financial performance of the Zambian economy are no longer valid today.
"It is now evident that Zambia's current levels of debt even after it receives its full quota of debt relief as defined in the decision point document under the HIPC initiative will continue to be unsustainable," he said.
He said the pull-out of Anglo America Corporation from the Konkola Copper Mines, the impact of drought necessitating imports for food security and the failure to attain the HIPC completion point by December this year were major shocks to the country's economic growth.
Mr Magande said Zambia would still continue to carry the burden of debt servicing until the second half of next year and the worsening economic scenario was the growing burden of servicing domestic debt.
He commended other donors that had also expressed willingness to provide debt relief beyond the ordinary decision point amounts to enable the country achieve sustainable completion point.
He also called on the US government to influence other donors not in the same group to reduce Zambia's debts as well.
"This is a relief to the Zambian government and the people and it will help the country move forward in terms of national growth," he said.
Zambia is also a beneficiary of many US-funded initiatives, including President George Bush's emergency plan for AIDS relief of $15 billion, and is expected to receive $4 million for the prevention of mother to child transmission of AIDS.
Be the first to Write a Comment!
Copyright © 2003 The Times of Zambia. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
