Ghana turns spotlight on growth-enhancement projects

Accra, Jan. 22, GNA- Government on Monday said it has turned its focus on growth-enhancement projects, having received additional debt relief, under the Multilateral Debt Relief Initiative scheme, which has had more positive impact on the country's debt sustainability ratios. It is the main thrust of Ghana's new financing policy, which aims at increasing the country's capacity to maintain a sustainable debt ratio for growth.

Mr Baah-Wiredu, Minister of Finance and Economic Planning, who announced these, also indicated that the central goal of the new policy was to accelerate the growth of the economy so that Ghana could achieve its avowed middle income status with per capita income of at least 1000 dollars by 2015.

He said "In doing so, we are mobilizing the right mix of aid resources while at the same time making sure Ghana's debt remains sustainable in the long run to finance its growth and poverty reduction strategy of the country," Mr Baah-Wiredu said.

He was speaking to the Ghana News Agency after opening a one week workshop on the World Bank/IMF Long Term Debt Sustainability Framework for Low Income Countries, which was being attended by 36 participants from WAIFEM member states, in Accra.

The agenda, was designed to guide borrowing decisions of low income countries in a way that locks in their financing needs with their current and prospective ability to service debt. Mr Baah-Wiredu noted that the Growth and Poverty Reduction Strategy Two, was introduced to foster the development of the growth-enhancing programmes, which was been implemented under his guidance between 2006 and 2009.

He expressed regret that many countries in Africa were faced with the challenge of striking a delicate balance between maintaining sustainable debt levels and fastening pace of socio-economic development, which often involved external borrowing to augment available domestic resources.

Mr Baah-Wiredu said "In the process, many countries slipped into unsustainable debt levels and strong debt overhang, owing largely to weak terms of trade and poor export performance including exogenous shocks, thus accumulating debt service arrears."

He said the Ghanaian government would be standing by for the outcome of the workshop to help it boost its debt situation. Dr Chris Itsede, Director General of the West African Institute for Financial and Economic Management, said the event was meant to provide training on debt sustainability, based on the new methodology of the World Bank and IMF for low income countries.