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24.06.2004 General News

Ghana Makes Progress In HIPC - Akomea

By ISD

The Information Minister, Nana Akomea has stated that despite the initial difficulties Ghana faced when the government decided to go HIPC, the country could now be eligible for debt relief after satisfactory performance.

Briefing the media in Accra today, Nana Akomea explained that a country is not automatically admitted into the HIPC Initiative merely because it has so decided and also met the requirements or criteria. One must apply and the application must be assessed or evaluated on the basis of continuing satisfactory performance in the Country Assistance Programme (CAP), he explained.

According to the Minister, the next major review programme of Ghana's performance to finally reach the Completion Point will depend on the continued success of the implementation of the current (CAS) with the World Bank/IMF. That is, Ghana Poverty Reduction Strategy (GPRS) agreed to with the World Bank/IMF and other creditor nations in 1999.

The Minister was of the view that if these indications are confirmed by the review next month, then Ghana would have reached the Completion Point. “This would enable us to access the full benefits of the HIPC initiative”, he said.

As a result of the good progress made, a total amount of ¢1.5 trillion debt of the country has been cancelled since June 2002. These monies are being spent on the provisions contained in the Ghana Poverty Reduction Programme (GPRP), which has been agreed upon with the World Bank/IMF and development partners.

Nana Akomea pointed out that the HIPC relief or saving are additional resources to the country's otherwise regular budget resources. He mentioned some Ministries and District Assemblies in the country which have benefited from HIPC funds.

He emphasised that the funds went into projects such as health, education, water and sanitation. At the completion point , the debt relief is estimated at 3.5 billion dollars, bilateral creditor nations would write off stock debts of 1.5 billion dollars, while the multilateral would provide “flow” relief of about 100 million dollars every year for the next 20 years.

HIPC completion point, a challenge to national economy- Nana Akomea Accra, June 24, GNA - The Minister of Information, said on Thursday, that the challenge facing the nation, when it obtain HIPC completion point in July this year, was how to sustain the gains it achieved under the Initiative to strengthen the national economy. Nana Akomea, who was speaking at a press briefing in Accra, said the HIPC Initiative, gave debt-servicing relief to the economy thus ensuring that the savings made were channelled to development projects. He said 1.5 trillion cedis, was the total savings made, while the quantum of debt relief was estimated at 3.5 billion dollars. Nana Akomea said the next review assessment of the country's performance and debt sustainability would be done after the completion point.

"If we are assessed to have performed well by all the indices, then we would have reached the completion point."

This he said would encourage bilateral and commercial creditor nations to write off the country's stock or total debts of 1.5 billion dollars, while the multi-laterals-World Bank, IMF and other lending institutions, would provide "flow" relief of about 100 million dollars every year for the next 20 years.

Nana Akomea said such a measure would cause the ratio of the country's total debt to the total annual domestic revenue to fall from 570 per cent to below 250 per cent, while the ratio of the total debt to total annual export revenue, will fall from 157 per cent to below 100 per cent.

He said it was crucial for Ghana to be able to sustain the course to reach the HIPC completion point. 24 June 04

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