Ghana’s external debt soars

...Each Ghanaian owes ¢3m ...Babies and pregnancies above two weeks inclusive Ghana's total external debt situation has risen sharply from two billion dollars in 1984 to over seven billion in June 2005. Currently, total external debt stock stands at US$ 6.3O7 billion.

These figures translate to about 58 trillion cedis, making up the external debt stock alone.

As such, each of the 20 million Ghanaians might have to pay 3 million cedis each if the debt were to be paid tomorrow. If the internal debt is added, the number may reach an alarming level.

Figures available at the Bank of Ghana revealed that, out of the total external debt, US$5.31 billions are long-term, US$696.07 millions are medium term and the remaining US$ 143.25millions are short term loans.

The current external debt is owed to multilateral creditors; the Paris Club, Non-Paris club and the rest being components of commercial loans.

The level of the debt stock is not the source of worry to observing Ghanaians, the astronomical rate at which the numbers are rising with attendant conditionalities, that often tie up the country's hands at its back.

The G-8 finance ministers announced on June 11, 2005, proposals that could lead to 100 per cent cancellation of the outstanding debt of Highly Indebted Poor Countries (HIPCs), including Ghana, owed to the IMF, World Bank and African Development Bank.

Ghana's outstanding debt obligations to the three multilateral institutions at the end of June 2005 was estimated at US$5,153.20 million, representing about 81.7 % of the total debt.

If a 100 % cancellation is realized, it would lead to a reduction in the external debt stock to about US$1.2 billion.

Ghana had benefited tremendously from the enhanced HIPC initiative, which led to a windfall of US$49.0 million in June 20005 alone.

These are positive indicators pointing to the fact that, the debt cancellation will eventually be a reality.

Ghana had already signed bilateral debt relief agreements with Sweden and the USA, resulting in debt cancellation of US$20.34 million and US$4.6million respectively.