Following Paris Club Sao Tome and Principe wants Portugal and Angola to pardon debt [ 2007-05-31 ]
Lisbon, Portugal, 31 May – Sao Tome and Principe obtained a debt pardon from the Paris Club and now wants Portugal and Angola to follow that example, said Zeferino Ceita, advisor to the archipelago’s Planning and Finance Minister.
Speaking over the telephone to Portuguese news agency Lusa, Ceita said that the Sao Tome government had recently had “verbal” guarantees from Portugal’s Finance Ministry that existing debt will be dropped – of around US$10 million.
Angola is currently the archipelago’s main creditor, with debt owed of US$20 million, with so far inconclusive discussions for the debt to be pardoned currently underway.
Total debt to bilateral creditors currently stands at US$80 million, while the country owes almost US$1 million to the Paris Club, with the entire balance of debt to the International Monetary Fund (IMF) and World Bank dropped in March.
The Paris Club, which brings together 19 creditor nations, last week pardoned US$24 million in debt, and committed to negotiating the pardon of the remaining 13 percent.
According to Ceita, this pardon, along with a potential one from Portugal and Angola, will reduce debt servicing responsibilities for the archipelago.
Until last year Sao Tome is the most indebted Portuguese-speaking nation, with foreign debt equivalent to 1,665 percent of its annual exports of goods and services, taking into account an average for between 2002 and 2004, according to World Bank figures.
Alongside negotiations with bilateral creditors, the Sao Tome Finance Ministry wants to move ahead with legislation to set limits for State debt-levels and define the channelling of financing taken on, “to prevent what has happened in the past,” Ceita said. (macauhub)
