Accra, June 17, GNA - The President of African Development Bank (AfDB), Mr Omar Kabbaj has welcomed the decision of G-8 Ministers of Finance to write off 100 per cent of the debts countries that had reached the completion point of Highly Indebted Poor Countries (HIPC) Initiative owed the AfDB; the International Monetary Fund (IMF) and the World Bank.

A statement from AfDB on Friday said he also urged other donor countries to support the initiative. Ghana is among the countries benefiting from the debt relief. Mr Kabbaj congratulated British Prime Minister Tony Blair and the Chancellor of the Exchequer, Gordon Brown for the leadership role that their country played in achieving this important breakthrough. He also welcomed the G-8 pledge to safeguard the financial integrity of the international financial institutions as reflected in the decision of the G-8 to compensate the AfDB and the World Bank for the forgone principal and interest repayments of the debts cancelled.

"The continued ability of these institutions to provide development finance over the long term is of vital importance to the development prospects of Africa," he said. He also welcomed the G-8 pledge that the debt relief financing would be additional to regular replenishments of International Development Agency (IDA) and Africa Development Fund (ADF). Mr Kabbaj noted that the new debt relief agreement of the G-8 Ministers would free considerable resources for the beneficiary countries, enabling them to increase their investments in key sectors, such as education and health, as well as finance other poverty reduction efforts and facilitate their progress towards attaining the Millennium Development Goals (MDGs).

In this regard, Mr Kabbaj noted that the countries that had reached their completion point had made significant progress in achieving macroeconomic stability and had taken action to improve their investment climate by reforming their financial sectors and pursuing governance reforms. Mr Kabbaj expressed his confidence that these countries would stay on course of their reform programmes, as these were essential for accelerating economic growth and reducing poverty. Mr Kabbaj expressed the hope that the forthcoming G-8 Summit at Gleneagles in July 2005 would result in additional actions being taken by the Group that were critical for supporting Africa's development efforts. These include measures to raise Official Development Assistance (ODA) levels significantly in line with the pledges made at Monterrey in 2002 and recent other fora. In addition, he expressed his hope that agreement would be reached on other proposals to raise and frontload ODA such as the International Finance Facility (IFF) proposed by the United Kingdom (UK), and various international tax proposals supported by France and Germany. In addition, he noted that Japan had proposed an enhanced private sector assistance programme with the AfDB.

Mr Kabbaj pointed out that the AfDB; IMF and World Bank would soon hold meetings to discuss and map out implementation modalities for the G-8 debt relief initiative, as it was important to ensure close collaboration and coordination among the three institutions for the successful implementation of the initiative. Finance Ministers of G-8 countries on June 11 at a meeting in London announced their decision to cancel more than 40 billion dollars of debts owed to the World Bank, IMF and AfDB. The G-8 communiqu? indicates that its member countries would extend 100 per cent relief on the debts owed to the multilateral finance institutions by countries that had reached their completion points under the HIPC initiative.