Wednesday, July 18, 2007

(DAILY MAIL) State ponders $600m debt cancellation

State ponders $600m debt cancellation

Finance and National Planning Minister, Nga’ndu Magande, said efforts to obtain debt relief under the enhanced HIPC initiative from the remaining creditors had been stepped up. In April 2005, Zambia’s external debt amounting to US$3.8 billion out of a total US$7.2 billion was cancelled.

Following the qualification to the HIPC initiative completion, Government entered into negotiations with both multilateral and bilateral donors to discuss cancellation of the remaining debt.

Mr Magande said in an interview in Lusaka that his ministry was currently having discussions with remaining bilateral creditors namely Brazil, Bulgaria, Russia, India and Iraq. He said Russia had agreed that a team goes to that country for discussions while Brazil had not yet replied to Government’s request.

Mr Magande said following the opening of an embassy in Brazil, Zambia’s ambassador assigned to that country had been asked to approach Brazilian Government on outstanding debt.

The minister, however, hoped that Brazil would reply to Government’s request soon.

Commenting on the debt owned to Iraq, Mr. Magande said Government had not yet approached Iraq as it was considering using the United Nations’ system once security stabilised in that country.

He added that Government was also in discussion with India though the remaining debt was not huge.

Mr Magande said through India’s ambassador in Zambia, Government was in discussion to find out exactly how much debt had remained.

“We do owe India not more than US$30 million. The problem is that, the money we owe India belongs to so many companies, and we are trying to reconcile our information with them,” he said.

Meanwhile, Government will soon launch an aid policy and strategy aimed at strengthening the efficiency of aid.

Mr Magande said in line with the strategy, a foreign aid reporting and monitoring system would also be developed.

He added that as a first step, the ministry would create an integrated database on external aid to ensure reliability and comprehensiveness of aid financing included in the budget.

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