Big reduction in foreign debt

Ethiopia's foreign debt has declined to US $5.2 billion, the Ministry of Finance and Economic Development is quoted as saying by the Ethiopian News agency (ENA) on 23 November. The agency quoted the head of the ministry's loans and investment department, Teklu Tefera, as saying Ethiopia's foreign debt amounted to $10.2 billion in 1999. He said that the Russian Federation, after joining the Paris Club, had cancelled 80 percent of the country's debt to the former Soviet Union; the remaining 20 percent had been included in the debt relief under the Paris Club's "Naples Terms". This had brought about a 67 percent reduction, thereby reducing the country's total debt to $ 5.2 billion, said ENA. In November alone the IMF and the World Bank announced that Ethiopia had qualified for $1.9 billion debt relief, while the Italian government also cancelled a $375 million debt, all under the Heavily Indebted Poor Countries (HIPC) initiative. Ethiopia is the 24th country to qualify for debt relief under the HIPC's enhanced framework. The savings from debt servicing as a result of the country's HIPC qualification would amount to nearly $100 million a year for the next 20 years, providing much-needed succour to a country whose average per capita earnings at $100 per annum ranks second-lowest in the world.