HIPC offers no solution -IMF & MOF

After nearly seven months of advertising the Highly Indebted Poor Countries (HIPC) Initiative as the answer to the nation’s indebtedness, both the Ministry of Finance and the International Monetary Fund (IMF) have conceded that HIPC is not the panacea to Ghana’s debt burden.

This new position according to the paper sharply contrasts with earlier impression created by the Kufuor administration and its donor partners, led by the IMF/World Bank and Britain, that HIPC is a solution to the country’s economic crisis.

“HIPC is not a panacea to the debt crisis,” said Girma Bergashaw, IMF Country Director in Ghana at a National Forum on the role of the IMF in Ghana’s Development Process. A deputy Finance Minister, Dr. Adombire Agambila confirmed his views later, in an interview with the Public Agenda. “No one has ever said HIPC is a panacea”, he said.

Mr. Akoto Ampaw of Jubilee International Movement for Economic and Social Justice, who had expressed strong views about the initiative, forced this view out of Bergashaw after a lengthy debate on the initiative during the national forum at the Teachers’ Hall in Accra.

“HIPC is an illusion and the government of Ghana has become hostage to policy prescriptions from the donor community”, Akoto Ampaw contended in response to Bergashaw’s assertion that HIPC will offer the biggest relief to Ghana.

Akoto Ampaw, a legal practitioner has consistently argued that the introduction of HIPC is an obvious indication of the failures of the past attempts by the multi-lateral institutions to address the debt crisis in the developing world.

His position is that, far from being a radical new policy whose only condition is re-allocation of national resources towards Poverty Reduction Strategy Programmes, HIPC is actually founded on old conditionalities of Structural Adjustment and basic performance criteria imposed on receiving countries.

“IN the long run, HIPC will not achieve the stated objective of providing an avenue for debt relief”, Bergashaw told the forum.

While conceding the initiative’s inability to meet all the fiscal problems of the country, Agambila challenged those who are opposed to HIPC to offer alternative programmes to address the debt burden.

“Our options are not mutually exclusive to the HIPC initiative, and if there are Ghanaians with other options, we will be happy to hear them,” he said.

He believes that the only open option is through traditional debt rescheduling, which, he says, has never helped this country (Ghana) since the 1966 coup.

Akoto Ampaw doubts whether Ghana’s debt will be sustainable after going through the completion point of HIPC, which is projected to be in 2004. He cites 23 countries that have all gone through the process but ended up with debts that are considered “unsustainable” by IMF’s own criteria.