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Terkper debunks return to HIPC speculations

The Finance Minister has rubbished suggestions that Ghana will go back to being a Highly indebted Poor Country (HIPC). Seth Terkper indicated in his supplementary budget statement that as at May 2016, Ghana’s debt had reduced from 72% to 63%.

The Finance Minister has rubbished suggestions that Ghana will go back to being a Highly indebted Poor Country (HIPC). Seth Terkper indicated in his supplementary budget statement that as at May 2016, Ghana’s debt had reduced from 72% to 63%.

 

The HIPC Initiative, introduced by the International Monetary Fund (IMF) and the World Bank provides debt relief and low-interest loans to cancel or reduce external debt repayments.

 

As at December 2015 the country’s debt was Ȼ 97.2 billion, out of which Ȼ39.4 billion is domestic and Ȼ 57.8 billion foreign but that figure increased in 2016, the minister admitted.

 

According to him, as at May 2016, the country’s total debt stood at Ȼ100.8 billion with 40.9 billion being domestic and Ȼ59.9 billion being external.

 

By World Bank parameters, if a country’s debt-to- Gross Domestic Product (GDP) ratio crosses the 70% mark, the country is classified HIPC.

 

Business mogul and PPP flagbearer, Dr. Papa Kwesi Nduom and some economists had warned that the rate at which the government was borrowing could plunge the country into HIPC again.

 

Mr. Terkper stated in his supplementary budget presentation on Monday that Ghana’s debt to GDP ratio has fallen from 72% to 63% as at the end of May 2016, meaning the country is far from returning to HIPC.

 

Mr. Terkper lauded the slow growth of the country’s debt, adding that government is on course to reducing it even further.

 

‘The GDP grew by 3.8% by the end of 2015 better than the projected 3.5%. The economy was at 4.9 percent by the first quarter of 2016 compared to 4.5% recorded in 2015.’

 

In the supplementary budget presented to parliament, the government is seeking the approval of Ȼ1.8 billion.

 

An Appropriation Bill is expected to be presented to parliament and if it is passed, the government can go ahead and spend the money.

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