Debt campaigners have welcomed the decision of the Paris Club of creditors to cancel US$347 million of Togo’s debt and impose a moratorium on remaining debt payments to these creditors until 2011.
Creditors cited the food crisis as the main reason why had been granted the moratorium, which will last until 2011.
Jubilee Debt Campaign was amongst those calling on the G8 Finance Ministers, who met at the weekend, to ensure that the debt cancellation – or at least a moratorium on payments – was extended to other poor countries, including Haiti.
Debt campaigners called upon the IMF and World Bank to follow the Paris Club’s lead and speed up Togo’s entry into the Highly Indebted Poor Country (HIPC) debt relief scheme, which would permanently cancel much of Togo’s debt burden, and to drop the use of economic policy conditions which are often counter-productive and slow down its debt relief programme.
They also called on the G8 Finance Ministers to offer concrete relief to countries affected by the food crisis through immediate deeper and broader debt cancellation or a moratorium on repayments.
The World Bank’s fund of $1.2 billion to fight the food crisis, announced on 29 May 2008, incorporates $1 billion of new loans and has been described by Jubilee Debt Campaign as “a sticking plaster”.
Jubilee Debt Campaign Director Nick Dearden said: “This debt cancellation comes not a moment too soon, but Togo is only one of the countries feeling the impact of the food crisis. Cancellation or a moratorium on debt repayments could provide a lifeline to these countries. If the G8 Finance Ministers’ meeting in this weekend want to deal holistically with the food crisis, they must be very clear about the role of debt in exacerbating that crisis.”