THE WESTERN WORLD and the Bretton Woods institutions - the World Bank and the International Monetary Fund (IMF) – as well as the African Development Bank have agreed to a proposal cancelling 100 percent of debt owed to them by Ghana and 17 other Heavily Indebted Poor Countries (HIPC).
Meeting in London Saturday, the G8 finance ministers agreed to write off the $40 billion owed them by 18 of the world's poorest countries, 14 of them in Africa.
The deal would save the 18 countries a combined total of $1.5 billion a year in debt repayments.
The beneficiary countries include our own dear nation and sub-regional neighbours, Benin, Burkina Faso, and Mali.
The 18 countries became eligible for the debt relief by virtue of policies and programmes implemented under the HIPC initiative.
Without doubt, this must be a huge relief, not only for debt cancellation activists and campaigners, but for every beneficiary of the benevolence of the G8.
That is why all Ghanaians and not only the Kufuor administration have a reason to be excited and grateful for this 'little mercy'.
In a statement following the G8 finance ministers meeting in London to prepare for July's G8 summit in Gleneagles, Scotland, US Treasury Secretary John Snow said,
“Relieving poor countries from their debt burdens so they can focus on meeting their development goals is an important element of President Bush's comprehensive development strategy for Africa.”
Truth is, he did not need to add the 'President Bush's comprehensive development strategy” argument, for we have always known that such huge debt write-off would afford us the luxury of focusing all our scarce resources to meet our development needs and goals.
One significant point though, which needs to be stressed, is that the 18 countries became eligible on the basis of set targets in good governance and anti-corruption crusade.
That is why we acknowledge that for Ghana to be chosen among the first batch of eligible countries for the relief is a pointer to the big faith our debtors have had in the Kufuor-led New Patriotic Party (NPP) management of the country since January 2001.
It's such a massive vote of confidence.
It also amounts to a massive legacy of the ruling government. That the Kufuor administration has through its economic policies managed to secure the cancellation of Ghana's total debt of almost $6 billion since it assumed political office in 2001, cannot be wished off. There cannot be any better news than this at the moment and we won't begrudge the government celebrating it.
But while we at Gye Nyame Concord congratulate government for this significant achievement, we also see it as a big challenge to the Kufuor administration, since the write-off now puts government on the carpet as to how it would manage the country after the write-off.
Again the world will be looking at how we use the benefits to be accrued to solve the nation's economic problems. Nobody needs to tell us that there is more to be done to develop the socio-economic base of the country in our quest to help reduce poverty.
While we are happy about our situation as a beneficiary country, we believe that, the G8 must also widen the debt relief programme to benefit more poor nations. It should also consider the issue of agric subsidies, including assistance to poor countries to develop their local industries, as well as increase opportunities for free trade between poor nations and the developed world.