Togo's foreign debt will be slashed more than 80 percent after the African nation took steps to recover from economic crisis, the International Monetary Fund and the World Bank said Tuesday.
The Bretton Woods institutions said their executive boards had approved Togo's eligibility for the debt relief upon reaching the completion point under the Enhanced Highly Indebted Poor Countries Initiative.
The HIPC milestone will lead to up to 1.8 billion dollars of debt relief for Togo, representing an 82 percent reduction of its external debt, the IMF and the World Bank said in a joint statement.
"Of the resulting reduction of about 1.8 billion dollars in the stock of debt, 47 percent will come from multilateral creditors, 50 percent from Paris Club creditors, and the remainder is expected to come from other bilateral and commercial creditors," they said.
"Togo can now continue its impressive success in devoting more of its scarce resources to priorities such as social needs and rebuilding its infrastructure, rather than debt service," said Marshall Mills, IMF mission chief for Togo.
The World Bank country director for Togo, Madani Tall, called on the government "to maintain the momentum by using this debt relief for reducing poverty and making the economy more diversified and competitive."
Togo was the 31st country to reach the completion point under the HICP debt-relief program, two years after beginning the process.
During that time, the government followed IMF recommendations to adopt prudent budgets, improve tax collection, pay state arrears, privatize public companies, end gasoline subsidies and put in place a system to curb oil price increases.