Paris Club writes off US$1.4bn of debt

The Paris Club of nation creditors has agreed to cancel US$1.4 billion of Zambia's debt. It is anticipated that with the debt relief, Zambia should save an average of US$30 million per year over the next 15 years. In order to contribute to restore Zambia's sustainability, they decided to cancel 1.403 billion US dollars in nominal terms, the Paris Club said in a statement. "Most creditors also committed on a bilateral basis to grant additional grant relief to Zambia so that the stock of the debt owed to Paris Club creditors would be reduced by a further 393 million dollars in nominal terms."

The relief of US$1.4 billion means Zambia's debt to the Paris Club creditors has been reduced from US$1.92 billion to US$124 million as a result of the agreement together with additional bilateral assistance. "Paris Club creditors also agreed to reschedule 50 per cent of the payments due in 2005, 2006 and 2007 on the debt remaining due after additional bilateral cancellation," the statement read. The Paris Club is an informal group of creditor governments from major industrialised nations, which meets monthly to discuss the restructuring of the debts of debtor countries. (The Post, Lusaka)