The minister of Finance, David Carew, has explained the debt situation of the country during a West African Institute for Financial and Economic Management (WAIFEM)/Debt Relief International (DRI) strategic meeting in Freetown.
The minister said government debt situation had improved markedly after the Highly Indebted Poor Countries (HIPC) completion point was reached in December 2006.
Mr Carew said with the implementation of the HIPC and MDRI debt relief including the Paris Club, Sierra Leone’s external debt stock reduced from around US$1.7 billion to US$523 million by the end of 2007.
He said the Bretton Woods Institutions [the IMF and the World Bank] the African Development Bank, the European Investment Bank, OPEC Fund, IFAD and the Paris Club creditor countries had all delivered their share of the debt relief.
Mr Carew said, “government has approached the World Bank to finance the second IDA Debt Reduction programme to address external commercial debts,” which he said was expected to commence before the end of this year.
The Finance minister said since 2002 when Sierra Leone reached the enhanced HIPC Decision point, total debt relief received from creditors amounted to US$173 million; an equivalent to Le450.7 billion.
“The IMF on their part, have disbursed the full amount of their share of the relief, which is currently utilized on a piecemeal basis mainly on poverty related programmes,” said Mr Carew.
He pointed out that once the total expected debt relief was fully delivered, total external debt stock would be reduced significantly from about US$1.7 billion in December 2006 to less than US$300 million. The Finance minister averred that with prudent borrowing and effective debt management supported by sound macroeconomic management, Sierra Leone’s external debt indicators would remain sustainable in the medium to long term period.