HIPC Has Failed

The government’s option for the Highly Indebted Poor Countries (HIPC) initiative is turning out to be a disaster and the Minister of Finance, Yaw Osafo Maafo is busily trying to limit the damage it is doing to the economy and the image of the Kufuor administrative.
Only last week, Mr Maafo called on the IMF and the World Bank to review the conditions attached to the adoption of the HIPC initiative because some of them are acting as breaks on the country’s development efforts.
Although Mr Maafo did not elaborate, it is known that he has personally been in the forefront of the fight against the privatization of Ghana Commercial Bank, one of the many conditions attached to the HIPC initiative.
Mr Maafo was also instrumental in the position adopted by the NPP in its 2000 election manifesto to subsidise agricultural inputs, a position which is at variance with the HIPC condition of withdrawing subsidies on agriculture.
The main conditions attached to the HIPC initiative include the privatization of key state enterprises such as the GCB and Tema Oil Refinery, the implementation of policy of a full cost recovery in the education and health sectors, liberalization of both internal and external trade, among others.
The appeal by Mr Maafo to the IMF and World Bank to review the conditions attached to the HIPC initiative clearly exposes government propagandists who lied that there were no conditions attached to the initiative.
According to Mr Maafo, one of the key reasons for adopting HIPC was that, it would help in achieving debt sustainability. However, since the adoption of the initiative, Ghana’s debt stock has been rising steadily. As at January 2001, Ghana’s internal and external debt was put at ?41 trillion but this shot up to more than ?62 trillion as at the beginning of this year.