Ghana to Save $250m From HIPC

Ghana will save $250m on debt relief from between 2002-2003 as it implements the Highly Indebted Poor Countries (HIPC) initiative. The amount is expected to rise to about $280 million by 2004, when the country reaches the concluding point of the HIPC initiative.

This was disclosed by Dr. Mohamadu Bawumia, a member of the HIPC Task Force at a seminar on "HIPC Awareness and Sensitisation" in Accra on Friday, organised by the Ministry of Finance and Economic Planning. Dr. Bawumia spoke on "The Benefits of the HIPC initiative for Ghana."

The seminar was to educate the various organisations and civil society on government efforts towards the country's implementation of HIPC for debt relief.

Dr. Mohamadu Bawumia who is also at the Research Department of the Bank of Ghana (BoG) said the reason for Ghana to adopt the HIPC initiative was because the debt burden was having serious repercussions on economic growth.

He said a survey conducted by the task force on debt relief and the macroeconomic scenario indicated that the country was to receive about $2.2 billion as debt relief from the HIPC initiative in a period of 20 years.

Dr. Bawumia explained that the country would enjoy the maximum debt relief from the initiative if policies were put in place.

He urged Ghanaians to remain calm because the benefits of HIPC would be realised gradually.

He said the government aimed at achieving maximum debt relief from all creditors. Also government hopes to mobilise grants and very cheap loans to finance poverty reduction programmes and would regularly analyse the impact of debt relief to avoid falling back into the debt trap.

The Deputy Minister of Finance, Mrs. Grace Coleman said the government has started preparatory work to ensure that the maximum debt relief that Ghana is seeking under the HIPC initiative is received as quickly as possible.

She said the government has updated its database on the nation's debt, confirmed the figures to external creditors and developed the Poverty Reduction Strategy paper.

Mrs. Coleman said the nation would gain much from the HIPC initiative because the relief would directly go to finance rural development activities and basic public services.