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Here’s why Ghana can’t go back to HIPC

Ghana, led by President John Agyekum Kufuor, joined the Heavily Indebted Poor Countries (HIPC) in 2002. This was a period when the economy was plagued by crippling debt and appalling poverty.

The International Monetary Fund (IMF) and the World Bank Group’s International Development Association (IDA) agreed on February 22 and 26, 2002, respectively, to support Ghana’s comprehensive debt reduction package under the improved HIPC project.

Ghana’s creditors erased its debt of around US$3.7 billion.

As the local economy has been in shambles since 2020, several Ghanaians have questioned whether the country will return to HIPC.

In response to this on GhanaWeb TV’s The Lowdown program hosted by Daniel Oduro, Professor Lord Mensah, a lecturer at the University of Ghana Business School, stated that Ghana cannot return to HIPC.

Here’s why Ghana can’t go back to HIPC

He said, “We can’t go back to HIPC because the type of loans that will call for HIPC are not the type of loans we are holding now. The loans that took us to HIPC were more or less like government-to-government loans. That one, a government can sit somewhere through their parliamentary approval and say they have forgiven you.”

Professor Lord Mensah stated that the conditions for debt cancellation were to ensure that countries under HIPC used the funds owed creditors to improve residents’ lives through better healthcare, road construction, and other developmental projects.

It should be noted that the Ghanaian government, directed by the Ghana Poverty Reduction Strategy (GPRS), developed a thorough plan for the programme’s utilization of monies made available through debt relief under the improved HIPC Initiative.

The government noted in the GPRS that the HIPC Initiative alleviation will largely focus on improving education, healthcare, rural infrastructure, and governance.

A portion of the relief was also set aside to help reduce the substantial burden of domestic public debt.

Meanwhile, former President John Agyekum Kufuor explained in a recent speech to a grand durbar of chiefs and people of Larteh Akwapim that his government’s decision to declare Ghana an insolvent state, and thus a Highly Indebted Poor Country (HIPC), was based on a firm assurance of debt cancellation from two female British politicians, Baroness Valerie Amos and Clare Short.

Akosua Boatemaa

I'm Yours Truly, Blogger Akosua Boatemaa. I'm here to feed Your eyes and Ears with Authentic News Updates.

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