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07.02.2006 General News

IMF urges Ghana to use debt relief funds wisely

By GNA

Accra, Feb. 7, GNA - A team of the Executive Board of the International Monetary Fund (IMF) currently visiting Ghana has urged Ghana to make good use of debt relief, "so that we do not come here in 10 years time to talk about another debt relief issue".

The seven-member team of Executive Directors noted that Ghana and 17 other countries were forgiven their debts in order to ensure debt sustainability as well as enable the country to meet its development goals especially under the Millennium Development Goals.

Mr Hans Scholer, Executive Director representing the U.K. and leader of the delegation, told financial and business journalists that the team was in Ghana to hold consultations with civil society groups, government officials, academia and the private sector to validate reports submitted by staff of the Fund in October 2006.

The Delegation, which met with President John Agyekum Kufuor on Monday, is in Ghana to acquaint itself with Ghana's progress in the use of IMF and donor resources freed by the debt relief.

The delegation, which would be in Ghana for four days, is visiting five countries in West Africa and Central Africa.

"We are also in Ghana to find out more about the country, beyond what our staff reports say. It is most appropriate to talk to the people on the ground and know what they think about governance and socio-economic issues affecting them," Mr Scholer said.

On why the IMF, G8 and the World Bank did not recommend total debt cancellation, Mr Scholer said the debt represented taxes of people in the developed countries and could not just be given away.

"Besides we cannot write off the debt to all these 18 countries because they are big and we have a criterion in place for cancellation," he said.

The IMF cancelled a total of 4.5 billion dollars owed by Ghana with January 1, 2005 as the cut off date.

Mr Scholer described the Fund's relationship with Ghana as "positive and strong, as it has been for several years". Mr Ondo Mane, Executive Director for Francophone Africa and Equatorial Guinea, denied that most of the Fund's programmes had failed because they were prescriptions forced down the throats of developing countries.

He said Ghana's programme, for instance, was what the Government itself had proposed. "We are just supporting the government to implement it."

Mr Mane explained that it was the IMF's position to ensure that countries including Ghana achieved micro-economic stability, "and we are very happy that Ghana over the last couple of years has shown the capacity and resilience to develop a strong economy towards the path of growth."

Mr Mane said every country at one time or the other would have to borrow money, but it would have to pay back. This money, he said, would have to be used wisely on sectors such as infrastructure development. 07 Feb. 06

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