Guinea signs debt deal with Paris ClubBy XINHUA | Thursday, April 12 2012 at 16:21
Guinea and the Paris Club creditors on Wednesday signed an agreement for reduction of her external public debt following the approval in February by the International Monetary Fund (IMF), for a new three year arrangement under the Enlarged Credit Facility, an official source said on Wednesday.
A statement from the French Embassy in Guinea said that this agreement was reached according to terms that were drafted by the Paris Club creditors with a view of supporting Guinea's efforts to qualify for debt reduction under the auspices of the Highly Indebted Poor Countries' Initiative (HIPC).
The agreement will see Guinea's external debts reduced between January 2012 and December 2014, by 84 per cent, which translates to over $344 million.
In order for the cancellation of the country's external debts to have a positive impact, the Guinean government has agreed to implement the measures identified in the poverty reduction strategy, whose terms of reference were already defined by Guinea and her development partners.
The statement said that by January 1, 2012, Guinea's debt to Paris Club creditors was estimated to be $750 million.
Members of the Paris Club who participated in negotiating the restructuring Guinea's debt were Germany, Austria, Belgium, Denmark, Spain, the U.S., France, Italy, Japan, Norway, Netherlands, Russia and the United Kingdom. Brazil also took part in the process of readjustment of the debt.
The Guinea government has on its part committed to carry out the reform program which will enable it to quickly qualify for debt cancellation under the HIPC initiative in order to benefit from the cancellation of the remaining external debt by the Paris Club creditors.
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