São Tomé and Príncipe gets debts cancelled

São Tomé and Príncipe has today been granted debt cancellation of $317 million - more than two thousand dollars per person in the country.

São Tomé and Príncipe - a West African island nation and the smallest African country after the Seychelles - has been struggling under a large debt burden for years. It has a population of just 153,000 people, whose average daily income is less than $1. But its debt at the end of 2004 was over $362 million - around $2,400 per person.

Now, São Tomé and Príncipe has finally completed the Heavily Indebted Poor Countries initiative (HIPC), which is the major route to debt cancellation for the poorest countries. It is the 22nd country to complete HIPC. The cancellation this initiative now delivers - thanks to pressure from campaigners - is substantial. São Tomé and Príncipe will get $317 million cancelled: $264 million of this is from the standard HIPC initiative, and more than $50 million from the Multilateral Debt Relief Initiative agreed by the G8 at their 2005 summit in Gleneagles, after determined worldwide calls to drop the debt.

However, HIPC requires countries to spend years meeting conditions undemocratically set by rich countries, and which have often been very harmful, before they qualify for cancellation of debts. São Tomé and Príncipe has spent more than 7 years going through this initiative, during which time it has paid out over $18 million in debt service.

Jubilee Debt Campaign is calling for an end to these conditions, and for immediate cancellation of all unjust and unpayable debts, without requiring countries to go through HIPC.