SomaliPress.com

Tanzania Debt Buy Back operation

This is to remind the General Public and International Community at large that the Government of the United Republic of Tanzania launched the external commercial debt reduction operation of the United Republic of Tanzania, also called the Debt Buy Bank operation, on October 25th 1999.


The launching of this operation was made possible following the approval on June 29, 1999 by the Board of Directors of the World Bank of a grant of US$ 40.2 million from the Debt Reduction Facility for IDA - Only countries. The grant will be funded by the KfW acting as agent for the Federal Government of Germany the State Secretariat for Economic Affairs, Government of Switzerland and IDA grant.

The total debt eligible under the Operation, which represents arrears, accumulated in the 70's and 80's towards foreign creditors when Tanzania failed to meet much of its external payment obligations due to foreign exchange problems, amounts to US$ 623 million. Under the operation, which also includes a Debt-for- Development option, Tanzania offers to purchase eligible debts at a price of 12% of the eligible principal outstanding. Acceptance of the offer by the relevant creditors will extinguish all principal and accrued interest.

Tanzania is one of World's poorest countries, with a committed external debt outstanding of around US$8.3 billion and faces an unsustainable debt burden.This operation therefore represents an important step towards the implementation of the Government's Debt Reduction Strategy. Following recent IMF and World Bank preliminary review, Tanzania qualified for consideration of additional debt relief under the Highly Indebted Poor Countries (HIPC) program. All creditors with eligible debts are called-upon to take advantage of this golden opportunity to extinguish their debt claims before 30th January 2000.

Last Updated on Tuesday 24th November 2009

Terms: