Malawi debt cancellation seen by Sept-World Bank

LILONGWE, June 19 (Reuters) The World Bank and International Monetary Fund (IMF) are likely to cancel Malawi's external debt of about LILONGWE, June 19 (Reuters) The World Bank and International Monetary Fund (IMF) are likely to cancel Malawi's external debt of about $2.9 billion by September, a World Bank official said today.

Khwima Nthara, the World Bank's economist for Malawi, told Reuters in an interview that in his opinion the country had met all the requirements for debt cancellation under the Heavily Indebted Poor Country Initiative backed by the two institutions.

''Our conclusion was that Malawi has met all the requirements for reaching completion point ...,'' he said.

''We are now finalising the HIPC Completion Point document in which we are making a case to the boards of the World Bank and the IMF that we think Malawi has done enough...,'' he said.

In an annual budget last week, Malawi's Finance Minister Goodall Gondwe predicted growth would quicken to 8.4 percent this year from a sluggish 2.1 percent in 2005, while inflation was set to subside to 10.4 percent from 15 percent last year.

He also sharply raised the amount of money allocated for agricultural and irrigation programmes in the drought-stricken southern African country.

Nthara said the long-awaited debt relief would probably not be approved until September, due to the August holiday period.

There were two conditions which had not been met but these would probably be waived, he added.

One involved allocating at least 13 percent of the recurrent budget to health spending, while another stipulated that 6,000 students enrol for teacher training.

REUTERS MP PM2115 .9 billion by September, a World Bank official said today.

Khwima Nthara, the World Bank's economist for Malawi, told Reuters in an interview that in his opinion the country had met all the requirements for debt cancellation under the Heavily Indebted Poor Country Initiative backed by the two institutions.

''Our conclusion was that Malawi has met all the requirements for reaching completion point ...,'' he said.

''We are now finalising the HIPC Completion Point document in which we are making a case to the boards of the World Bank and the IMF that we think Malawi has done enough...,'' he said.

In an annual budget last week, Malawi's Finance Minister Goodall Gondwe predicted growth would quicken to 8.4 percent this year from a sluggish 2.1 percent in 2005, while inflation was set to subside to 10.4 percent from 15 percent last year.

He also sharply raised the amount of money allocated for agricultural and irrigation programmes in the drought-stricken southern African country.

Nthara said the long-awaited debt relief would probably not be approved until September, due to the August holiday period.

There were two conditions which had not been met but these would probably be waived, he added.

One involved allocating at least 13 percent of the recurrent budget to health spending, while another stipulated that 6,000 students enrol for teacher training.

REUTERS MP PM2115