EDITORIAL: $55 Bil Debt Cancellation Worth Only $2 Billion for Africa
For Ghana What Worth?
OF the $55 billion debt owed by poor countries in Africa which have been cancelled, it will actually amount to freeing $2 billion a year for Africa, and in the words of Max Lawson, a policy advisor for Oxfam, the giant aid lobby group, the deal 'would only scratch the surface.'
That amount which represents what the quantum of money to have been repaid by the beneficiary nations in Africa is roughly the same amount needed in Aid, if any real meaningful impact is to be made by the debt cancellation.
In Ghana, the deal championed by the British Prime Minister and his heir apparent Gordon Brown has been generally welcomed by most Ghanaians though the opposition NDC and other aid activists have poured cold water on the deal, which offers potentially opportunities for the ruling government if they are able to cash in on the fillip the breather may bring.
The President, Mr. J.A. Kufuor, on his return from Abuja, where he had volunteered to be reviewed by his peers under the African Peer Review Mechanism (APRM), told the press that with the cancellation of the over $4 billion debt for Ghana, it would translate into pushing interest rates down so that the private sector would be able to access cheaper credit for businesses. He said also that it is the reward for opting for HIPC.
Ghana's Finance and Economic Planning Minister, Mr. K. Baah Wiredu, who accompanied the President, said, focus on the windfall cancellation would be, investing in ports, railway and the eight Millenium Development Goals (MDGs).
The Bush-inspired aid strategy that is being anxiously awaited by the Government to release a minimum of $ 8 million into the economy to tackle the MDGs, which include reduction in maternal mortality, free Universal Primary Education, and good governance.
The critics within the society pressed the vexed issue of trade. Elsewhere trade injustice is being plugged. According to African Business Association's Charles Cullmore, the situation with Ghana's cocoa is instructive - In Ghana, they export cocoa to Europe, because it is a commodity that it needs, but Ghana faces high tariffs from Europe if they want to import milk and sugar. This in effect undermines the country's effort to develop its own capacity to add value and earn commensurate sums for their produce.
The former president, Jerry John Rawlings, talking from experience has also cautioned that we adopted a wait-and-see attitude, as some earlier pledges made by some of these same leaders were never fulfilled.
The opposition spokesman on Finance Honourable Moses Asaga told Joy FM last Sunday night that the money should be invested or channeled into savings that will create jobs - expanding our capacity to expand businesses.
Thee donors must give us free hands in utilizing what ever comes out of the deal, he had said.
According to Mr. Kwamena Ahwoi, closer analysis of the beneficiary nations shows that they are not models of good governance, citing a country like Chad in particular, adding that it probably suited the interests of the western countries.
Nurses and doctors, trained here with our meager resources, end up in the developed countries, constituting losses to us, and gains to them. Our lack of capacity to train more of these professionals to replenish what we lose and also feed them, affects them also.
Secondly, the large numbers of people who emigrate to western countries, is beginning to take a toll on them, and driving home clearly to them that a lot of these people are economic migrants.
Poverty in the third world undermines economic and social development in the western countries, in the sense that particularly, our continent is becoming unattractive as commercial partners for global trade and investment purposes.
Furthermore, poverty is driving away the able-bodied people from the rural farming areas, into urban centers, thereby, reducing the production in food and cash crops.
What African and other third world leaders need to aver their minds to, is how not to get into the same hole again. And the only way to address that is to avoid doing the same things over again.
The HIPC initiative though relieved our government of pressures from our creditors, the burden imposed on the citizens whilst raising the needed revenue was clear to all.
We need to start rebuilding our industries, in order to expand employment avenues and the capacity of our economy to withstand the shocks of the unfair world trade order. We cannot grow our economy through taxation, when we lack a production base.