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Ottawa, February 11, 2002
2002-016

Canada Cancels Tanzanian Debt

Finance Minister Paul Martin and Minister for International Cooperation Susan Whelan have announced that the Government of Canada will forgive all $83.6 million in debts it is owed by Tanzania.

"We congratulate Tanzania on its efforts to strengthen economic reform and for making poverty reduction a priority," Minister Martin said. "Tanzania’s debt load is unsustainable and cancelling these debts will enable it to invest more in critical areas such as health care, HIV/AIDS prevention and primary education."

Minister Whelan informed Tanzanian President Benjamin William Mkapa of Canada’s decision yesterday during an official visit to Tanzania. "Canada is committed to working with the Tanzanian people and helping them implement their plan for reducing poverty in their country," said Minister Whelan.

Tanzania is one of 17 heavily indebted poor countries (HIPCs) which have outstanding debts to Canada. So far 11 of these countries have benefited from a moratorium on debt service payments under the Canadian Debt Initiative (CDI).

Announced in December 2000, the CDI complements existing debt relief agreements under the HIPC Initiative by allowing for all debts owed to Canada to be officially written off as countries complete the requirements of the HIPC process, which Tanzania has recently done.

Canada was the first creditor country to call for forgiveness of all bilateral debt owed by HIPCs.

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