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IMF requests surplus gold to be used for debt relief in Sierra Leone

IMF requests surplus gold to be used for debt relief in Sierra Leone

According to some old reports on the economy of Sierra Leone, it has been studied that the International Development Association (IDA) and the IMF or the International Monetary Fund had agreed to financially support an all-inclusive debt reduction package for Sierra Leone. Sierra Leone had been and is still being counted among the HIPC or the Heavily Indebted Poor Countries. This initiative had been taken in the year 2004 and recent reports show little change within the economy of Sierra Leone. Total debt relief from the Sierra Leonean creditors through debt settlement or consolidation is worth nearly $950 million. Under the decisions taken by the two ace organizations, the IDA had provided $122 million in NPV (Net Present Value) that was delivered through a time period of 20 long years. Both the IDA and the IMF had started providing debt relief services to the consumers of Sierra Leone in an attempt to bring back the balance within the economy.

As history repeats itself, 2011 is not much different than 2004 for this nation. The development groups have called on the West African governments and have asked them to use $2.7 billion from the sale of gold by the International Monetary Fund in order to finance a new wave of debt relief services that is concentrated towards the poorest nations of the world, including Sierra Leone. The board that comprises of the IMF will sit for a discussion in Washington to discuss what they should do with the profits that will be raised from disposing off over 400 metric tons of gold, which amounts to one-eighth of IMF’s total stock of gold.

When the IMF announced to this sell-off in the year 2009, this move was being considered as the best move to bring back control on the distressed finances and put it on a sound long term footing. The main feature of this strategy by the IMF would be the creation of an endowment and also augmenting the confessional lending to the developing nations. The IMF has been doing very well just after the economic crisis, yet nations like Sierra Leone that are heavily indebted are forced to remain in debt due to no fault of their own. Nations such a Sierra Leone that are extremely poor have been facing financial disaster that is caused by the West banks. Most financial experts are of the opinion that the IMF must use this extra money in boosting the debt relief industry in Sierra Leone and cancel their debts.

An eminent Minister of the African Forum and Network on debt has reportedly said that this has been a long awaited chance for the IMF to eradicate the debts of the poor countries in West Africa. As countries like Sierra Leone are drowning in an ocean of debt, this is the right time to use the surplus money in helping the economy get back on track.  Campaigners say that Sierra Leone is an example of a poor and crippling economy that is in debt due to the impact of the financial crisis. The debt in Sierra Leone in has doubled in the recent years and therefore more of the revenue of the government will be used in repaying the debt in such nations.

Author Bio: Jack Hudson is a financial writer and he enjoys writing articles on global financial situation, stock market, debt consolidation, debt settlement and mortgages along with other finance related topics. He is also associated with some online financial communities like DebtCC. You can follow us on Twitter.

by Jack Hudson

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