Burkina Faso becomes fifth country to reach completion point under the enhanced HIPC initiative 

On April 12th, 2002, Burkina Faso became the fifth heavily indebted country to reach Completion Point under the enhanced HIPC initiative. In total, her debt will be reduced by some $195 million in net present value terms, in addition to the $229m provided under the original HIPC initiative, for which she reached Completion Point in July 2000. Some bilateral creditors will be providing an additional $22m in net present value terms as a result of commitments to debt cancellation over and above the levels provided for within the HIPC initiative. 

In August of last year, the IMF and World Bank agreed that additional relief would be provided to countries hit by the worsening global economic outlook, over and above the amounts agreed at Decision Point. Jubilee Research is pleased to note that Burkina Faso has become the first HIPC to benefit from this commitment. Owing to the drop in export values over the past two years as a result of the calamitous fall in cotton prices, Burkina Faso's creditors have agreed to provide her with an additional $129m of debt relief in net present value terms. 

In total, therefore, Burkina Faso will see her external debt reduced by $575bn in net present value terms, which will correspond to a reduction in debt service payments of $930m over time. According to the World Bank, this means that Burkina Faso will see the proportion of her exports that must be spent on debt service payments falling from 23% in 1999 to only 6% in 2003. Similarly, debt service as a percent of revenues will fall from 11% in 1999 to less than 5% by 2003. 

A full analysis of the debt deal received by Burkina Faso by Jubilee Research will become available as soon as the full Completion Point document is made available by the World Bank.