Kufuor Votes For HIPC

President J.A. Kufuor has finally stated his position on whether Ghana should adopt the Heavily Indebted Poor Country status (HIPC) or not. This was disclosed by the Minister of Finance Yaw Osafo Marfo when he presented his 2001 budget last Friday. 'The President has finally instructed the Ministry of Finance to take all the necessary steps to ensure that Ghana gets the full benefit under the HIPC initiative,' the minister announced.

Giving the background to the need to join HIPC the minister said last year, the servicing of government's external debts took as much nine percent of all the economic resources available in the GDP. In addition, he said 5.3 percent of Ghana's resources were spent on domestic interest payment.

With this grim financial situation facing the country the government would have to spend C4.4 trillion this year to servicing external debts and 2.1 trillion on domestic interest payments. That leaves the government with few options. In view of the debt trap the government finds itself and the debt sustainability analysis carried out on external inflows and internal revenue generation the president is of the view that Ghana should take advantage of the HIPC initiative. President Kufuor's new position contradicts his Independent Day declaration that Ghana is not a poor country and can indeed forge ahead on her own steam. It also leaves many people confused because a few days ago the Minster for Media Relations, Miss Elizabeth Ohene said in an interview to a state daily newspaper that the government had not taken a definite position on the issue.

Gloomy as the situation may be, not many Ghanaians are amused about the country joining the HIPC initiative. There have been discussions on air, in newspapers, drinking bars and on the streets.

A group calling itself the Socialist Group and led by Kwesi Pratt Jnr. and Dr. Abdul Nasser has protested vehemently against Ghana joining the HIPC group. The group is of the view that the HIPC initiative is an attempt by the IMF and World Bank to lure Ghana to declare herself 'hopeless' so that they can manipulate the country to suit the interest of the west. 'It is meant to divert the government's attention from the numerous problems facing the country', the group said in a statement.

The Centre for Policy Analysis has also stated its disapproval of Ghana joining the HIPC. In a similar vein the Trades Union Congress has called for a thorough debate on the issue before a final decision is taken. Though the president has stated his position on the issue, it is expected that the government would subject it to public debate before a final decision is reached.