Malawi to receive additional debt relief

The World Bank and the IMF announced on Thursday an additional debt-reduction package for Malawi, agencies reported on Friday. The assistance is part of the Heavily Indebted Poor Countries Initiative (HPIC), under which countries that agree to follow IMF-prescribed economic reforms and to draft poverty reduction schemes become eligible for multilateral and bilateral debt relief. The relief envisioned for Malawi is worth US $643 million in present value terms, IMF and World Bank officials were quoted as saying. They added that over the next 20 years the country will save an average of US $50 million a year. The World Bank will also relieve Malawi of the obligation to repay it US $331 million in present value debt, while the assistance offered by the IMF is worth US $30 million. Malawi will be entitled to the full package, including relief provided by bilateral creditors, when it implements a strategy aimed at reducing poverty.