[ 2015-04-17 ]

IMF: Ghana could be HIPC by end of 2015
According to the International Monetary Fund
(IMF), Ghana's total public debt could hit the
dreaded 70% mark by the end of this year.

If this prediction by IMF Fiscal Monitor -
released at the on-going IMF/World Bank spring
meetings in Washington DC - comes to pass, then it
would be official that Ghana is a Highly Indebted
Poor Country (HIPC).

According to the United Nations and World Bank,
any time a country's public debt hit or crosses
the 70% of its Gross Domestic Product (GDP), then
that country can be described as highly indebted.

That means it would be difficult for that country
to settle its debts on time.

Joy Business has also gathered that the IMF has
also classified Ghana among high risk of debt
distress countries.

This has resulted in the IMF pushing Ghana to stop
borrowing on the commercial market, with the
exception of the June bonds issue which will be
used to repay maturing debts.

Until Ghana's debt position improves the Fund
might not sanction the country's attempts to
secure new loans on the commercial market.

According to Bank of Ghana, as at the end of
December 2014 Ghana's public debt stood at GH¢76
billion, representing about 67 percent of the
Ghana's GDP.

An assessment of loans approved by Ghana's
legislature since January 2015 points to the
likelihood that the country's debt stock could
cross the 70% mark before the end of 2015.

However, Deputy Finance Minister, Mona Quartey,
has ruled out the possibility of HIPC status for
Ghana.

According to her, Government is showing “more
discipline” in managing its debts.

She maintains that very soon the rewards of such
discipline would become apparent.

“We are not going to HIPC. We are going into a
three-year IMF programme. We have been there
[HIPIC] once and we are not going back there”,
she told Joy Business.

“We move forward not backwards” she
encouraged, saying Ghanaians should “declare and
decree” positive confessions.

Meanwhile, persons close to government tell Joy
Business managers of Ghana's economy are working
to prevent the country's debts from hitting
alarming levels by ensuring that state
institutions borrow on their own books.

Source - Joy News

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