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IMF ready to cancel Liberia debt

The International Monetary Fund says it has secured sufficient funding to start canceling Liberia’s debt to the international agency.

The International Monetary Fund says donor nations have pledged $842 million, which will start the process once the pledges are honored. IMF chief Dominique Strauss-Kahn said it was a “critical step... toward comprehensive debt relief” for Liberia.

Liberia is struggling with the legacy of 14 years of brutal civil war, which ended in 2003, with 270,000 dead. Liberia has found it difficult to get financial support because of a total international debt estimated to be $4.5 billion. The IMF debt relief plan involves a three-year growth program to reduce poverty and help for Liberia to finance its remaining obligations. The money to pay off the debts is understood to come mainly from existing IMF reserves, and an additional $71 million from the G8 group of industrialized nations.

Last month President Ellen Johnson-Sirleaf visited Washington and argued Liberia had met political and economic requirements to qualify for help with its debts. “President Johnson-Sirleaf has done a tremendous job in a difficult situation and this breakthrough will help all of us to offer her and Liberia more support,” World Bank President Robert Zoellick said in a statement. (BBC)