VENTURES AFRICA – Ivory Coast is set to receive debt reduction from the International monetary Fund (IMF), and the World Bank as a result of the nation’s successful completion of stages set by IMF-World Bank Heavily Indebted Poor Country (HIPC) scheme.
According to a statement issued by both financial institutions on Tuesday, the West African nation will enjoy more than 2.15 trillion CFA francs ($4.1 billion) in debt reduction.
According to the IMF and World Bank, the boards of both institutions had agreed to reduce the debt owned by Ivory Coast by 24 percent. This amounts to $3.1 billion reduction in the nation’s external debt.
In the joint statement, it was added that Abidjan could also enjoy a further $1.3 billion debt reduction under an initiative of multilateral debt relief.
According to the statement, both institutions have established that Ivory Coast is making good progress regarding the requirements for reaching the completion point under the Heavily Indebted Poor Country (HIPC) scheme initiative.
It was also added that the post-conflict world’s largest cocoa exporting nation has implemented several reforms notably those in the cocoa sector; it is also addressing poverty via the initiation of several poverty reduction schemes, and is maintaining a stable macroeconomic policy. These had enabled the country to meet requirements for the funds.
After completing the reform, Ivory Coast will be able to resume paying coupons on its defaulted 2017 $2.3 billion Eurobond that went into default during the four-month civil war following a disputed presidential election in late 2010.
Since 2010, Abidjan has been unable to make payments on three coupons twice – in 2010 and 2011. However, it is scheduled to pay its next coupon on June 30 and had promised pay the arrears on July 2.
“Reaching the completion point will also help Ivory Coast normalise relations with its external creditors. Although this will increase debt service payable in the medium term, it will also help catalyze further support from donors and potential investors,” Doris Ross, IMF mission chief for Ivory Coast said in the statement.