Italy has cancelled all the debt owed to it by Mozambique - a total of $524m.

The agreement on the debt cancellation was signed in Rome at a ceremony attended by Mozambique's president, Joachim Chissano, and the Italian prime minister, Silvio Berlusconi.

Mr Chissano is in Rome for the United Nations Food and Agriculture Organisation summit.

The annulment has come at a crucial time for Mozambique, which is suffering from hunger and an Aids epidemic.

Aid appeal

Mozambique is still struggling to recover from the aftermath of devastating floods in 2000 and 2001.

And, this year, parts of the troubled country has not escaped the drought that is plaguing much of southern Africa.

The Mozambican government has already appealed for emergency aid.

The UN's World Food Programme estimates that at least 12.8 million people in six countries across southern Africa need help, and that 515,000 people in Mozambique need food aid.

Italy's decision comes just weeks before leaders of the G8 group of the world's eight leading industrialised nations meet in Canada to discuss Africa's plight.

Increasing aid and investment flows into Africa is one of the topics to be discussed at the summit, which starts on the 26 June.