Norwegian Government cancels Senegal’s debt

The Government agreed today to cancel the Republic of Senegal’s remaining NOK 236 million debt to Norway. Norway has earlier cancelled NOK 225 million of Senegal’s debt, and has now forgiven debts from developing countries amounting to a total of NOK 1.85 billion.

The agreement with Senegal is based on a multilateral framework agreement concluded in June 2004 in the Paris Club, which is a joint forum for creditor countries. The Paris Club decided to grant debt relief to Senegal in accordance with the international Initiative for Heavily Indebted Poor Countries, known as the HIPC initiative.

Under the Paris Club agreement Norway was obliged to grant a debt reduction of NOK 63 million. However, the Government has chosen to cancel the entire debt, giving Senegal an extra NOK 173 million in debt relief.

The debt originated from Norwegian deliveries and export credit guarantees to the shipping sector in Senegal.

In line with the Norwegian Debt Relief Strategy, the debt was cancelled without taking any funds from the development budget. The cancellation does not therefore affect development assistance to other poor countries. Senegal is the fourth country to have its entire debt to Norway cancelled, following Tanzania, Benin and Ghana.