Development Finance International
28 January. Republic of Congo Reaches Completion Point
Congo is the 28th country to receive HIPC and MDRI debt relief, totalling US$1.9 billion. For more details, click here. Pole-Dette is continuing to provide assistance to Congo to improve its debt management, through the HIPC CBP, most recently through an institutional mission from 8 to 12 June 2009.
19 January. Impact of the Financial Crisis on LIC Budgets
DFI has contributed a background paper for the 2010 UNESCO Education for All Global Monitoring Report, which is published today, analysing the impact of the global financial crisis on African government budgets and education spending. The paper concludes that many countries have been given more “fiscal space” to spend more to counter the effects of the crisis, which has meant that only a few have cut education spending, but that much more could be spent and financed with grants or loans, without jeopardising macroeconomic stability or debt sustainability, or creating excessive aid dependency. To access the background paper, click here, and for the overall UNESCO report, click here. The work will continue and broaden to cover all IDA-only countries and health spending, with funding from Oxfam.
15 December. HIPC Finance Ministers Network Praised.
A new book, Networks of Influence, published by Oxford University Press and edited by Leonardo Martinez-Diaz and Ngaire Woods, contains a chapter highly praising the HIPC Finance Ministers’ Network established by the HIPC CBP, for its influence on the design and implementation of successive debt relief initiatives. To quote Professor Gerald Helleiner, this “demand-driven, focused and flexibly structured network.. …successfully strengthened the voice of previously marginalised unheard actors on the global financial stage”. For more information on the book please click here, and for a copy please contact Matthew Martin at DFI. The network has been ended as of December 2009, but the DFI Group is continuing to promote the voice of low-income countries in global financial discussions at all opportunities.
8 December. Debt Relief and Better Aid Improve Service Delivery
A new book, published by the African Development Bank - Debt Relief Initiatives, Development Assistance and Service Delivery in Africa, and edited by Matthew Martin and Désiré Vencatachellum, traces the processes and methods by which debt relief and better aid have dramatically improved delivery of the MDGs (especially health and education) in low-income African countries since 2000. Analysing the picture for the whole continent, and case studies of Ghana, Malawi, Senegal and Uganda, it concludes that debt relief and other high quality aid such as budget support have made a marked difference to MDG progress. For more information on the book, please click here, and for a copy, please contact DFI.
1 December. New IMF Borrowing Ceilings for LICs
As previewed last year, the IMF has introduced a new matrix for setting borrowing ceilings for low income country Fund programmes. The new matrix replaces conditions prohibiting contraction of debt with a grant element of less than 35%. Instead the borrowing ceiling will take account of a country’s debt vulnerability (measured by its DSF debt distress rating) and its macroeconomic and public financial management capacity (measured by CPIA and PEFA indices). Countries with high debt vulnerabilities and low capacity will face tighter concessionality requirements (minimum 35% grant element) than those with low debt vulnerabilities and high capacity (for the most more advanced LICs there will be no concessionality limit).
For a more detailed discussion of these limits see www.imf.org/external/ and www.imf.org
