MONROVIA (Reuters) - Liberia is on track to clear much of its remaining $1.7 billion in foreign debt under the Heavily Indebted Poor Countries initiative by the end of this year, an IMF official said on Tuesday.
“We are very confident that by the end of the year, Liberia will reach the HIPC completion point, ” said IMF First Deputy Managing Director John Lipsky, adding that it could be “much sooner.”
Liberia, Africa’s oldest independent republic, still recovering from a 1989-2003 civil war, was deemed eligible for the HIPC program in 2008 pending certain economic and structural reforms.
Lipsky said the government of President Ellen Johnson-Sirleaf had since made strong advances in financial management and transparency in the mining and energy sectors that had put it on track for HIPC completion.
Johnson-Sirleaf, the first woman to be elected president of an African country, took office in 2006 promising to rebuild the country and vowing zero tolerance for corruption.
The West African country cut its foreign debt to $1.7 billion in August through a $1.2 billion buyback of outstanding government debt that had been in default since the 1980s, a key step in normalizing relations with the investment community.
Most of the remaining debt will likely be cancelled when Liberia reaches the HIPC completion point, either through the HIPC program or under World Bank and African Development programs, the IMF has said.
The World Bank and the IMF launched HIPC in 1996 to provide a framework in which creditors can provide debt relief to the world’s poorest and most heavily indebted countries.