Uganda's debt to be relaxed through World Bank plan

About 2.7 billion U.S. dollars or half of Uganda's debt will be written off under a World Bank 37 billion dollar debt relief plan, according to a state-owned newspaper report on Thursday.

The decision, as part of an initiative to ease the crushing financial burden faced by some of the world's poorest nations, is waiting for approval by the World Bank's International Development Association (IDA), its main lending arm.

The plan announced in Washington on Tuesday aimed to entrench promises by the powerful Group of Eight nations to cancel poor nations' debts as outlined in their summit in Gleneagles, Scotland last July.

Uganda's current foreign debt is about 4.8 billion dollars with most of it owed to IDA. However, Finance Minister Ezra Suruma was unavailable to comment on the development.

Most of the debts owed by the world's poorest 40 countries which now stands at more than 56 billion dollars is owed to the World Bank, with the rest owed to the IMF and the African Development Bank.

"It's good news for developing countries. African countries, including Uganda in January also received IMF's 3.3 billion dollar debt relief," said Peter Allum, IMF's resident representative.

The IMF has already endorsed its part of the bargain, which initially covers 19 countries under the historic Multilateral Debt Relief Initiative.

Those countries covered have reached the completion point under Heavily Indebted Poor Countries initiative and the World Bank's debt relief plan will take effect on July 1 this year. They include Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Zambia, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania and Uganda.

Source: Xinhua