Japan has canceled all the debts owed by Zambia totaling 692 million US dollars, the official Zambia Daily Mail reported on Thursday.

Japanese Ambassador to Zambia Masaaki Miyashita and Zambian Minister of Finance and National Planning Ng'andu Magande signed the agreement on debt relief here on Wednesday.

Miyashita said the debt write-off is a result of Zambia's reaching the completion point of the Heavily Indebted Poor Countries initiative (HIPC) in April.

The purpose of the debt cancellation is to contribute to the economic and social development of Zambia and economic reform efforts undertaken, he said.

The International Monetary Fund (IMF) approved a 3.95 billion dollar debt relief for Zambia in June, in recognition of its meeting the macroeconomic goals set out under HIPC.

Meanwhile, the IMF board approved on Wednesday a 3.3 billion- dollar debt relief for 33 poor countries including Zambia. The debt relief was proposed at this year's Group of Eight (G8) meeting in Scotland.

Zambia's external debt will cut from 7.1 billion dollars before HIPC to 502 million dollars when the latest IMF debt relief is implemented, according to Finance Minister Magande.

Source: Xinhua