News Brief No. 97/7

News Brief: Camdessus Applauds Debt Relief for Uganda under HIPC

April 24, 1997

Michel Camdessus, the Managing Director of the International Monetary Fund, today applauded Uganda’s eligibility for assistance under the HIPC Initiative just approved by the Executive Boards of the IMF and the World Bank. "I am certain that this will be an extremely positive signal to the rest of the world, and I was happy to hear that the Ugandan Minister of Planning and Economic Development immediately reacted to this decision by warmly welcoming this package of debt relief."

Under the Initiative, Uganda is expected to receive about US$340 million (in Net Present Value (NPV) terms or in April 1998 dollars) from all its creditors, which represents a reduction of about 20 percent in Uganda’s debt. The IMF share of this assistance is about US$70 million. All multilateral creditors are expected to reduce their claims on Uganda in NPV terms by about 20 percent.

In nominal terms, the resulting total reduction in Uganda’s debt service is likely to be around US$700 million, depending on how the assistance is delivered. The IMF’s assistance would be provided at the completion point in the form of a grant into an escrow account, and would roughly cover payments in an amount of US$90 million, or 30 percent of Uganda’s debt-service payments falling due to the IMF over the next 9 years.