Finance minister details drop in foreign debt

Minster for Finance Basil Mramba said on Tuesday that Tanzania’s foreign debt had been reduced by nearly US $200 million in the last year, the Tanzanian ‘Guardian’ newspaper reported. However, Mramba told parliament that, at the end of June 2001, Tanzania still owed foreign lenders US $6.1 billion. Even if Tanzania was exempted from paying some of its remaining debt through the global Highly Indebted Poor Countries (HIPC) initiative, its debt burden would not be lifted soon, the minister stated. “The World Bank (WB) writes off only 69 percent of the debts, the International Monetary Fund (IMF) 78 percent and the African Development Bank (ADB) 60 percent,” Mramba said. In addition, both the World Bank and IMF wrote off debts over 10 to 20 years, while the ADB took 17 years, the report stated.

Tanzanian Prime Minister Frederick Sumaye said in June that tough preconditions for debt relief were making it difficult for the country to take advantage of the HIPC initiative. Tanzania has been receiving interim debt relief under the HIPC initiative since April 2000. The government has also expressed concern at what it called the “worrying contradiction” between the intensive focus on macroeconomic issues and unsatisfactory progress in critical areas of human and social development. In addition, at a meeting of the UN Committee on the Rights of the Child in Switzerland in June, a UN committee of experts expressed concern that, despite steps taken by Tanzania to protect child rights, the payment of some 40 percent of its national income to services related to external debt was likely to hinder social sector programmes. [for details, go to: http://www.reliefweb.int/IRIN/cea/countrystories/tanzania/20010615.phtml]