March 27, 2023

Historically, Ghana has been referred to as the ‘gateway to Africa’ but none of that has come with economic stability, or, given the country any superficial advantage over crises related to the economy.

If that were the case, President John Agyekum Kufuor would not have accepted the designation Heavily Indebted Poor Countries (HIPC) for the country in 2001 only months after taking over as Head of State.

The temerity with which his administration took that bold step was predicted by many as the ticking timebomb that was completely going to blow up the country’s economic prospects.

But that did not come to pass. Actually, signing up for HIPC rather saved Ghana a lot of financial stress when a chunk of its debt was cancelled.

On July 9, 2004, upon his return from Addis Ababa, Ethiopia, where he attended the Third Ordinary Session of the African Union (AU), President Kufuor told journalists at the Kotoka International Airport that $3.7 billion of Ghana’s debt was to be written off.

The announcement meant an end to the International Monetary Fund’s (IMF) award of Heavily Indebted Poor Countries (HIPC) Initiative Completion Point.

“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 under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Total relief from all of Ghana’s creditors is worth approximately US$3.7 billion, which is equivalent to US$2.186 billion in Net Present Value (NPV) terms,1 or 56 percent of total debt outstanding after the full use of traditional debt relief mechanisms.

“Under the decisions taken by the two organizations, assistance committed by IDA—US$781 million in NPV terms—will be delivered over a 20-year period and will cover on average 67 percent of debt-service obligations falling due to IDA. Debt relief provided by the IMF—US$112 million in NPV terms covering an average of 49 percent of debt-service obligations—will be delivered over the next eight years. Both IDA and the IMF will begin providing debt relief immediately, as will most official bilateral creditors. The bulk of additional assistance under the enhanced HIPC Initiative will be delivered when Ghana completes a number of agreed measures,” a report on the IMF website dated February 27, 2002, detailed.

That was the signal that Ghana’s debts had all been erased without it paying a single dime of it. That was Ghana’s moment of relief and a clean sheet for it to start all over again to economic independence, but how practicable has that been?

After a long period of uncertainty and a chunk of avoiding reality, the sitting president, Nana Addo Dankwa Akufo-Addo, ordered his Minister of Finance, Ken Ofori-Atta, to begin processes to return to the IMF.

The Friday, July 1, 2022, statement issued by the Minister of Information, Kojo Oppong-Nkrumah, said that President Nana Akufo-Addo wanted the finance minister to seek IMF’s support for an economic programme put together by the government of Ghana.

“The President of the Republic of Ghana, Nana Addo Dankwa Akufo-Addo, has authorised Finance Minister, Ken Ofori-Atta to commence formal engagements with the International Monetary Fund (IMF), inviting the Fund to support an economic program put together by the Government of Ghana,” the statement said.

That statement came at a point when the country’s total debt stock as of June 2022 was at GH¢334.8 billion.

“A look at the data from the Central Bank shows that year on year, from June 2021 to June 2022, the debt stock rose by about 17.5% from 334.8 billion Ghana cedis to 393.4 billion Ghana cedis.

“On a year-on-year basis, that is from June 2021 to June 2022, that represents an increase of GH¢58.6 billion,” portions of the Mid-Year Review Statement read by Ken Ofori-Atta in July 2022 said.

In 2020, there were rumours that Ghana, with a debt stock of GH¢274.1 billion, had returned to the status of HIPC. This viral claim was quickly debunked by the Minister of Information, Kojo Oppong-Nkrumah.

“There are suggestions being spread particularly on social media that Ghana has been declared HIPC again and I am sure you would have noticed that a lot of persons are sharing materials on social media that the IMF or World Bank has declared Ghana HIPC or listed Ghana as one of the HIPC countries and it is a suggestion that the economy is not as good a shape that we claim it is.

“For the avoidance of doubt and because we have also mentioned that we are aware that some persons in the weeks ahead of the elections will seek to spread a lot of false information and fake news, it is important to quickly respond to it right here and right now. Categorically, we say to you it is not true that Ghana has been declared HIPC or has been added to the list of HIPC countries,” he explained.

The country’s present economic situation appears critical but President Nana Addo Dankwa Akufo-Addo no longer believes in his own words that “we know what to do to bring the economy back to life.”

Now, all of his hopes are on God. Speaking at the 22nd General Assembly of the Presbyterian Church of Ghana at Abetifi on August 12, 2022, the president said he remains resolute in bringing the economy out of the trenches with appropriate policies and determination by his government.

He said even though naysayers may see it as an impossibility, he is confident that God will turn around the fortunes of the country.

“They said it was impossible for a short man to become president. They said it was impossible to implement Free SHS. They said it was impossible under the One District, One Factory initiative. They said it was impossible to pay Nursing and Teacher trainee allowances. What they forget are the words of St Mathew 19: 26 which say ‘but Jesus looked at them and said to them, with men this is impossible but with God all things are possible’. I continue to have an abiding faith in God to help turn the fortunes of our nation around especially with the appropriate policy, determination and hard work on our part,” he emphasized.

Today, the narratives may show that once in the history of this country, all of its debts were quashed, presenting it with a clean sheet to financial independence but with a debt stock in bigger multiples in 2022, and a lot of blame games being alluded to the likes of the novel Coronavirus and the Russia-Ukraine War; could Ghana ever get so lucky again?

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