A visiting United States government official said cancellation of Zambia's huge debt will assist the country to attain economic growth and result in poverty alleviation

The U.S. department of Treasury Deputy Assistant Secretary Larry Macdonald said here Sunday that multilateral debt relief would create new possibilities for the country's national development, Zambia Daily Mail quoted on Monday.

Macdonald said it is important for the southern African country to achieve an annual 7 percent to 8 percent economic growth so as to reduce poverty.

The official said he is optimistic that Zambia will perform well economically and emerge as a new economic leader in the near future.

Macdonald attributed the good economic performance of Zambia to a stable macro-economic environment and peace with its neighboring countries.

The appreciation of local currency against U.S. dollar is a normal phenomenon that has created confidence for external investors, he said.

He urged Zambian government to facilitate the creation of a new business culture by the private sector and reduce the cost of doing business.

Zambia's foreign debt had been significantly reduced to 4.5 billion dollars by the end of 2005. Under the new Multilateral Debt Relief Initiative (MDRI), the African Development Bank, the International Monetary Fund (IMF) and the World Bank are expected to cancel 100 percent of the debts Zambia owes them.

The southern African country so will save annually about 180 million dollars in debt service, the official said. The savings arising from the debt relief will assist the country's effort to reduce the current poverty by 50 percent by 2015.

Source: Xinhua