The Vice President of IMANI Africa, Bright Simons, says that about $6 billion was freed up for Ghana under the HIPC program.

He made the comment in a JoyNews Hotline documentary titled ”A Nation That Begs” by lead researcher and Data Analyst, Isaac Kofi Agyei which gives an account of Ghana’s dependence on debt relief programs due to unsustainable debt crises.

Mr Simons explained that the country was the second highest beneficiary of debt relief in Africa in terms of the proportion of GDP and how much was forgiven as far as the HIPC initiative is concerned.

“Ghana was the second biggest beneficiary of debt relief in terms of the proportion of GDP and that's a proportion of how much debt that was forgiven Ghana. It was number two on the list of African countries that had huge benefits from HIPC, more than $6 billion of money was freed up and for us” he added.

He expressed no surprise that Ghana could not take advantage of the debt relief and make reforms to the economy, indicating that the problem of mismanagement has been around since independence.

“The problem is that historically we always hit a roadblock but we just have to go and get back our creditors to forgive us. We've not been able to figure that out,” Mr Simons emphasized.

He went on to give a political and economic history of Ghana and the IMF, describing the cyclical nature of the country's debt woes and highlighting the fact that Ghana always goes back after ‘sudden shocks’ to seek relief.

Ghana’s HIPC Journey

Ghana in 2002 joined the HIPC under President John Agyekum Kufour. This was a time the economy was grappling with overwhelming debt and crippling poverty.

The International Monetary Fund (IMF) and the World Bank Group's International Development Association (IDA) agreed on February 22 and 26, 2002 respectively, to support a comprehensive debt reduction package for Ghana,”HIPC”.

The total relief from all of Ghana's creditors as of 2022 was worth approximately US$3.7 billion. The burden of debt was suffocating, and it seemed as though the future of the nation was hanging by a thread.

The Government of Ghana, guided by the Ghana Poverty Reduction Strategy (GPRS) drafted a detailed plan as per the requirement for the program for the use of funds made available through debt relief under the enhanced HIPC Initiative.

The government in the GPRS indicated that the HIPC Initiative relief would primarily target the allocation of funds towards enhancing education, healthcare, rural infrastructure, and governance.

 A portion of the relief was also earmarked to alleviate the significant burden of domestic public debt.

The government implemented measures to closely monitor the utilization of HIPC relief to ensure transparency and accountability. Adjustments were made to the existing budgetary accounting framework to precisely identify budget expenditures associated with poverty alleviation and to specify the portion funded by HIPC relief.