Treatment of the debt of Niger

Paris Club creditors agreed on January 25, 2001 with the Government of the Republic of Niger to a restructuring of Niger's public external debt. Given its track-record of reforms as well as the burden of its external indebtedness, Niger reached on December 13, 2000 its decision point under the enhanced HIPC Initiative and was granted an arrangement under the Poverty Reduction and Growth Facility with the International Monetary Fund.

This agreement consolidates roughly US$ 115 million. This amount consists of US$ 33 million in arrears as at November 30, 2000 and US$ 82 million of maturities in principal and interest falling due from December 1, 2000 up to December 31, 2003 (none of which is Official Development Assistance). Furthermore, around US$ 4 million in arrears on post-cut-off date debt are rescheduled.

The agreement is concluded under the so-called "Cologne terms" designed by Paris Club creditors for the implementation of the enhanced HIPC Initiative : pre-cut off date commercial credits falling due after decision point are treated so as to reach a 90% cancellation rate taking into account previous cancellations undertaken by Paris Club creditors ; the remaining amounts are rescheduled over 23 years, with 6 years of grace, at market rates of interest.

This interim relief will lead to the immediate cancellation by Paris Club creditors of about US$ 84 million of Niger's external debt, consistent with the implementation of the enhanced HIPC Initiative. These measures are expected to reduce debt service due to Paris Club creditors between December 1, 2000 and December 31, 2003 from US$ 126 million down to around US$ 10 million. The remaining payments consist of interest on the rescheduled amounts, late interest on arrears of post cut off date debt and current maturities on post cut off date debt. Niger is committed to use the resources freed by the present exceptional treatment of the debt on priority areas identified in the country's poverty reduction strategy.

The creditor countries expressed their readiness to reduce Niger's stock of debt, as soon as Niger reaches the completion point under the enhanced HIPC Initiative.