Canada Debt Relief

Canada debt relief announcements make it clear that Canada wants to reduce the debt burden from the poorest countries of the world. Recently, Canada announced to increase the amount of relief to the underdeveloped Third World countries. Canada and Netherlands are the two countries who have agreed recently to offer ADF (African Development Foundation) and IDA (International Development Association) debt service relief to the post- HIPC (Heavily Indebted Poor Countries) countries till 2015.

The Canada debt relief program also makes an increase in the number of nations eligible for the international debt relief assistance. In this step, Canada also wants other developing countries to join its hands and offer similar debt relief programs. The Canadian government believes that this proposal will facilitate the low-income nations of the third world with an opportunity to get rid of the past debt obligations and thus to invest in the best interest of their people. The government of Canada also mentions that it will exempt a debt amounting to $55 million owed by the poorest countries of the Third World.

Under the same initiative, Canada also announced that it will contribute approximately $172 million to the African Development Fund and International Development Association of the World Bank over the next five years. This relief plan will be available for the 15 countries attaining the Heavily Indebted Poor Countries Initiative and also to 4 other countries that have participated in the Poverty Reduction Support Credit Program of the World Bank.

Canada recently announced debt relief to 11 heavily indebted countries by a moratorium including Tanzania and ten other eligible countries. According to the Canadian government, the step has been taken to encourage the HIPC governments have the debt relief. When these 11 countries will have reportedly fulfilled the requirements under the HIPC debt initiatives, Canada will remove their debt completely.

The total amount of debt owed by these 11 Third World countries to Canada is 700 million Canadian dollars. Tanzania is the country that owes 70 million Canadian dollars to Canada. The other 10 countries that are included to have the benefit are Benin, Cameroon, Bolivia, Ghana, Ethiopia, Honduras, Guyana, Senegal, Madagascar, and Zambia.