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U.S. Forgives Tanzania’s Debt

July 5, 2002

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DAR ES SALAAM, Tanzania (AP) _ The United States has forgiven all of the remaining $21.3 million in debt owed by the Tanzanian government, the U.S embassy said Friday.

U.S. Ambassador Robert Royall and Finance Minister Basil Mramba signed the agreement Thursday at a July Fourth ceremony in Dodoma, Tanzania’s administrative capital

The debt was owed to the U.S. Export-Import Bank, a U.S embassy statement said. The United States first forgave Tanzanian debt last year, writing off $16 million in debt service payments.

The United States committed itself last year to offering Tanzania and other heavily indebted poor countries 100 percent debt reduction.

``While we are pleased that we can cancel existing debt as part of our ongoing assistance to Tanzania, external assistance will help alleviate poverty only in countries that have sound policies _ market-oriented mechanisms that encourage private investment, good governance, liberalized trade, and investment in human capita,″ Royall said.

Mramba welcomed the debt relief.

``We are now in a better position than we were before, but we are not debtless,″ Mramba told The Associated Press by telephone from Dodoma.

Last Month, Mramba said his government would spend $323.5 million in the fiscal year 2002/2003 servicing the national debt. It was not immediately possible to obtain the current figure of the external debt, but last year the Bank of Tanzania put it at $6.56 billion.

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