The phrase, Heavily Indebted Poor Countries (HIPCs), was coined several years ago to by the World Bank and the International Monetary Fund to describe the plight of 41 struggling countries in the developing world overwhelmed by massive amounts of debt.
The two international financial institutions took appropriate steps to reduce the debt burden on these poor countries by coming up with the HIPC initiative that was explicitly designed to provide exceptional assistance to countries that took concrete steps to make their economies work again.
Ghana was one of the beneficiaries. Our country was neck deep in debt owed to overseas lenders. To be brutally honest, our external and domestic debts were simply too huge. To be considered for debt relief, countries had to divert money meant for debt payment to poverty reduction, primary education and sustainable development, more broadly.
Let us give credit where credit is justifiably due, the NPP under Mr. John Kufour largely met the conditions imposed by the WB and IMF as they pertained to the HIPC initiative. Following Ghana’s strict adherence to the terms of the initiative, its debt burden was significantly reduced.
Yes, our economy recovered modestly from years of neglect and mismanagement and boom, the days of massive borrowing to finance infrastructural projects was at last over at least so many observers thought.
Ghana was going places until it was not going anywhere.
Dear Zaa Radio listeners, pardon me if I am boring you with a classroom lecture; nonetheless, it is important at this stage of our country’s development and paradoxically its mounting economic problems to lay out the truth.
In opposition, the NPP under the current occupant of Jubilee House, President Nana Akuffo Addo, swore to high heavens that it was not going to fly around world capitals, cup in hand, literally begging for loans.
In short, the NPP said in so many words that it was not the profligate NDC which it accused of reckless and massive borrowing. “We are not going to play the NDC card.” it thundered. “We are going to be bean counters, strict and careful with Ghana’s finances.”
But three years into its administration, the NPP has done what no other Ghanaian government has ever done in the nation’s history.
The NPP has borrowed excessively; it has indeed gone on a borrowing spree that threatens the financial well being of future generations of Ghanaians.
The NPP is on pace to borrow well over a third of a trillion dollars, a staggering amount of hard currency. Our debt burden now stands at 206 billion United States dollars and climbing.
Sadly, Ghana is once again hovering close to being a Heavily Indebted Poor Nation, a dubious distinction if there ever was one, thanks largely to a party that prides itself on being fiscally conservative.