Can a country turn debt into opportunity? With the right approach, it can
If managed effectively, debt can be transformed into a powerful tool for development. Côte d’Ivoire’s recent experience with a Debt-for-Development Swap offers valuable lessons for other countries considering similar strategies.
How Did the Debt Swap Work?
A Policy-Based Guarantee (PBG) from the World Bank enabled Côte d’Ivoire to secure a new commercial loan at a significantly lower interest rate. The proceeds were used to buy back up to EUR 400 million of expensive older loans falling due in the coming years. This swap freed up EUR 330 million in the next five years, with savings of EUR 60 million in present value terms.
The government of Côte…