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02.03.2009 Business & Finance

HIPC countries risk losing gains - Foon


Mr Momodou Foon, Acting Director General of West African Institute for Financial and Economic Management (WAIFEM), on Monday said post-HIPC countries risked losing the gains made through debt forgiveness if they did not adopt stringent debt management measures to lessen the impact of the global recession.

He said the global economic recession would cause decline in foreign aid and donor assistance, which would pose serious challenges to developing economies in meeting the Millennium Development Goals (MDGs).

"The developing countries without the means or will and depending largely on aid generosity of the so-called first world face greater challenges," he said.

Mr Foon was speaking at the opening session of a 10-day training workshop in Accra to strengthen capacity of officials from Ministries of Finance and Central Banks.

Over 28 officials drawn from Anglophone West African countries would use the next few days to discuss debt management strategy, implementation of risk control, portfolio analysis and evaluation as well as how to be able to deal with the challenges of debt management.

Mr Foon said the current financial environment had fostered uncertainty, a situation which was inimical to debt restructuring, portfolio diversification and foreign direct investment.

He said as a result of higher deficits being financed from domestic sources, interest rate on domestic debt might edge upward to enable investors to hold on to them for long periods.

Mr Foon said poor and inefficient risk management measures and inability to appropriately recognise risk significantly contributed to the global financial crisis.