Italy has cancelled five million dollars owed her by Ghana, under an agreement signed in Accra yesterday.

A statement signed by Nana Ohene-Ntow, government spokesman for finance and the economy, said the five million dollars is part of the benefits Ghana is enjoying as a result of reaching decision point in the HIPC Initiative last February.

The agreement was signed by the Minister of Finance, Mr Yaw Osafo-Maafo and the Italian Ambasador, Mr Giancarlo Izzo.

The statement said under the agreement, Italy would automatically cancel another 32 million dollars owed by Ghana when she reaches the completion point under the HIPC Initiative by the beginning of 2004.

The agreement said Italy would continue to support Ghana's efforts at poverty reduction as part of its policy of instituting measures to reduce the external debt of HIPC countries with low per capita incomes.