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Commonwealth Secretariat press release

Commonwealth African Finance Ministers discuss dealing with debt

3 March 2003

Finance Ministers from Commonwealth African countries participating in the Heavily Indebted Poor Countries Initiative (HIPC) concluded a two-day meeting at the weekend. The third meeting of the Commonwealth HIPC Forum was chaired by the Hon Basil Mramba, the Minister of Finance for Tanzania.

The Ministers, who met in Dar es Salaam, Tanzania, said the Initiative has provided significant 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 HIPC countries achieve a sustainable exit from their debt as soon as possible.
One of the key issues that they identified was that several smaller creditors were not participating in the Initiative. Participants also 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. The Commonwealth Ministers 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 HIPC countries.

The ongoing challenges faced by countries that have completed the process was also discussed and 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 grants, to be increased and redirected to HIPC countries. They strongly supported a new International Financing Facility designed to double overseas development assistance to US$100 billion.

Note to Editors:
Finance Ministers or their representatives from Cameroon, Ghana, Malawi, Mozambique, Sierra Leone, Tanzania, Uganda and Zambia attended the meeting, together with representatives of the International Monetary Fund (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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