HIPC Pressure Mounts On Government

HIPC has become one of the most controversial economic decisions Kufuor's administration needs to take in the next few weeks. The question was and is whether to join.

Pressure groups are emphatic Ghana should not join HIPC. The NDC declined to subscribe to HIPC. The CPP has asked the government to ignore HIPC because it will not solve the country's debt crisis.

Akoto Ampaw of Jubilee 2000 slammed the initiative as another Structural Adjustment Progrmamme to impoverish poorer countries like Ghana in a radio interview last week.

The Centre for Budget Advocacy has also asked the government to ignore HIPC inspite of the savings the country might make on debt repayment.

The British government is busy working on Ghana to sign up HIPC. Ghana will save millions of dollars to develop education and health, they argue.

But the debate goes beyond HIPC. Critics insist that the steep rise in domestic debt, faster than external debt will offset benefits the initiative or even a cancellation of the debt will yield.

Ghana presently owes 41.1 trillion cedis. Close to 10 trillion of this debt is owed to local business and individuals.

Ghana's debt service was equivalent to two and half times the budget of health, education and water in 1997. External debt serving rose from $181.4 million in 1990 to $353.7 million (105,900 billion) in 1997. This has since doubled.