Canada Monday announced an immediate cancellation of 18.2 million Canadian dollars debt owed it by Ghana.

It also urged other creditor countries that are serious about improving the lives of the world's poor to follow its lead in applying a debt moratorium.

Secretary of State for Latin America and Africa, David Kilgour, announced the gesture in Accra when he led a Canadian team received in audience by Ghana's newly inaugurated President John Agyekum Kufuor at his temporary office at the State House.

The debt will be cancelled completely at the time of implementation of the Poverty Reduction Strategy as part of a moratorium initiated by the Canadian government on debt repayments owed by 17 Highly Indebted Poor Countries, including Ghana.

The 17 HIPC countries owe Canada about 1.1 billion Canadian dollars.

In the early 1980s, Canada wrote off 1.3 billion Canadian dollars in Official Development Assistance (ODA) debt owed by 46 developing countries, including Ghana.

Kilgour delivered a congratulatory message to Kufuor, from Canadian Prime Minister Jean Chretien who pledged to work actively with the new government to "capitalise on the momentum achieved in bilateral relations and promote collaborative activities in multilateral fora."

The message added: "This is a historic period for Ghana and the country stands as a model ...in the rest of the continent."

Kilgour also presented Kufuor with a congratulatory letter from the Governor General of Canada, Adrienne Clarkson, which said "the large number of Canadians of Ghanaian origin have enriched our country and heightened our understanding of yours."

Meanwhile, Kufuor said Monday his government would adopt a gradual approach in addressing the challenges facing the economy and called for the co-operation of western donors.

"I am counting on the multi-lateral institutions to be understanding as to how we pick our steps into the next stream," he said."

"I don't want to be stampeded," the Ghanaian leader said, when the World Bank country representative, Peter Harold, called on him at the State House.

Harold, who brought good wishes from World Bank Managing Director, James Wolfhenson to Kufuor, also renewed the Bank's relationship with the new government.

He said he regarded Kufuor's election as victory for democracy not only for Ghana, but also for Africa.

Kufuor restated his government's commitment to ensuring good management of the economy in order to bring a change in the life of the people.

However, this would have to be done step-by-step, he said, adding that government will not to start off at a break-neck speed.

Kufuor said the situation calls for trust and confidence building from international institutions.

"I want you to trust us, we do not want to deceive ourselves... we should be commonsensical," the President said.

He said the people have come a long way after 17 years of an economic recovery programme.

"At the end ..., there is no positive change in the life of the individual Ghanaian," Kufuor noted.

He said expectations are high with the coming into office of his government, adding that the new government will be working with a vision that is achievable and to give the people what they expect.