Audio By Carbonatix
Finance Minister Seth Terkper has rejected suggestions that Ghana is nearing the very precarious economic conditions that compelled the John Kufuor government to accede to the highly indebted poor countries (HIPC) initiative.
Ghana in April 2001, declared itself a Highly Indebted Poor Country (HIPC) - a temporary measure to give the government some breathing space to stabilise the economy and launch policies for growth.
Under the initiative, the country enjoyed debt forgiveness; it struggled to meet its financial obligations to its debtors at the time.
The country later exited the programme in July 2004 because it had attained an appreciable stability in the economy.
Ghana's economy is currently struggling with the local currency being worse currency in the world; interest rates are soaring and so too is inflation.
Governemt has been compelled to seek a bailout from the International Monetary Fund, prompting analysts to assert that the country is back to the same dire situation that necessitated its joining the HIPC initiative.
But Mr. Terkper believes that is farfetched.
He says the country’s current debt-to-GDP ratio is nowhere close to what it was when the government then led by president John Kufuor, took the decision to access the HIPC Fund.
“When we accessed HIPC, our debt-to-GDP ratio was 110% percent; currently our debt ratio is a little over 50%...I don’t think where we are is close to HIPC,” Mr. Terkper stated.
He is certain that the country will exit any of the programmes that government will enter into with the IMF.
“Every single programme that Ghana has entered [with the IMF], we have exited successfully and I have confidence that…we will exit successfully as we have done,” Mr. Terkper assured.
He stressed that negotiations with the IMF will centre more on seeking expertise rather than a financial package from the Fund.
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