The Ethiopian economy has received a major boost in the form of debt relief by the Paris Club countries, comprising mainly Western nations, and the African Development Bank.
Announcing the cancellation of us $758 million of debt, the Paris Club nations recently said Ethiopia's outstanding debt was us $153 million now. "Paris Club creditors welcomed Ethiopia's determination to implement a broad-based and rigorous economic programme which should provide the basis for sustainable economic growth and comprehensive poverty reduction," they added. The concession is part of the Heavily Indebted Poor Countries (hipc) initiative. Ethiopia's external public sector debt was us $6.8 billion in 2003.
The African Development Bank also agreed to cancel us $339.5 million of Ethiopia's debts and grant it us $88 million as loan. Many rich nations recently rejected the uk's proposal for debt relief to Africa through initiatives other than hipc (see 'Stingy lenders', Down To Earth, October 31, 2004).
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