China writes off 85% of Ghana's debts to it...

China said on Monday it was writing off 85 percent of the debts owed to it by Ghana, or the equivalent of $53.5 million. This is the single largest debt relief that Ghana has received this year.

Deputy Foreign Minister Yang Wenchang made the announcement during a three-day visit to the West African country, which has benefited from massive debt write-offs under the International Monetary Fund and World Bank's Heavily Indebted Poor Countries (HIPC) initiative.

"Thirty African countries will receive an average of 60 percent debt relief from the Republic of China," Yang told Ghanaian Finance Minister Yaw Osafo-Maafo.

An agreement to that effect has been signed between Osafo-Maafo and Yang Wenchang. Mr. Wenchang, who is also in charge of the Western Asian and African Affairs and Human Resources is on a three-day working visit to Ghana.

Mr. Maafo said China gave Ghana the interest free loans between 1961 and 1964.

Ghana paid 15 per cent out of the amount but was unable to pay the remaining 85 per cent, an equivalent of $53.5 million when the part payment was made in 1982. He explained that the amount written off did not fall under the Highly Indebted Poor Countries' (HIPC) initiative. The Finance Minister thanked the Chinese government and said Ghana would ensure that the assistance helped the country in its efforts to reduce poverty and create wealth.

For his part, Mr. Wenchang said his country decided two years ago to relieve and reduce debts owed her by some countries. As a result about 30 African countries would receive an average of 60 per cent debt relief. He said Ghana was one of the countries to receive the largest debt cancellation so far because "China values the development of relations between the two countries."