France cancels all of Togo's debt: minister

12th May 2011, Comments 0 comments

France has decided to cancel all of Togo's debt, amounting to some 100 million euros, in a bid to encourage the West African nation to pursue economic reforms, the finance minister here said Thursday.

The deal was signed on Wednesday between France's ambassador and Togo Finance Minister Adji Ayassor to cancel 101.1 million euros ($143.1 million) in debt.

"This agreement, under which France has cancelled 100 percent of Togo's debt, puts in practice France's commitment to carry out recommendations of the Paris Club," Ayassor said on state radio.

The Paris Club is an informal group of 19 creditor countries and includes the world's most industrialised nations. The group decided in December to cancel $203 million in debt to Togo.

Countries also indicated they intended to provide debt relief on a bilateral basis to Togo amounting to $404 million.

The moves come after the poor nation of some 6.6 million people took significant steps toward poverty reduction and economic reforms, the Paris Club has said.

The country relies heavily on agriculture, while declines in cotton production and a stagnant phosphate industry in recent years have contributed to its economic struggles.

Reforms have been underway to strengthen the banking sector, clean up public finances and improve operations at the port, an important aspect of the economy.

Ayassor called France's decision encouragement "to continue reforms underway since 2006 with the aim of addressing the economic situation in the country ..."

"The margin created by the cancellation of this debt will be used in the most efficient manner possible to create strong and durable economic growth conditions capable of markedly reducing the poverty that today affects the most vulnerable segments of our country," he said.

© 2011 AFP

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