Debt relief “not enough”

The World Bank has awarded Tanzania a substantial amount of debt relief under its Heavily-Indebted Poor Countries (HIPC) programme, but groups lobbying for total debt relief say this is not enough.

Under the award, Tanzania’s US $8 billion foreign debt will be reduced to some US $1.6 billion over the next five years, but John Garrett of the Jubilee 2000 group told IRIN on Wednesday a complete write-off would have been preferable.

“Tanzania’s debt is so large compared to what is waived,” he said. “A complete write-off of the debt could be a better option because it would give the country an opportunity to tackle the basic needs of its people.” He added that the conditions for the relief “usually impact negatively on the poor since in most cases the government has to cut back spending on social services”.

However, he stressed Tanzania was on the right track because it had come up with projects on which it intended to spend money released by the debt relief. These included rural infrastructure, education and health.

The World Bank’s country director for Tanzania, James Adams, was quoted by ‘The EastAfrican’ newspaper as saying the country had “consistently implemented the stringent measures” laid down by the Bank and the International Monetary Fund (IMF).

“Tanzania has also shown tremendous improvement in the management of inflation and government expenditure that was limitless in the past,” Adams said. The country had been successful in managing its fiscal deficit control and exchange rates regimes, he added.

Tanzania is the second east African country after Uganda to get relief under the HIPC programme.