Huge Domestic Debt An Obstacle

The government said on Saturday that it considers the huge domestic debt it inherited as the biggest single obstacle facing the nation and called for support to critically address it.

Finance Minister, Mr. Yaw Osafo Maafo, said the debt stock has negatively affected crucial areas of business and investment and has particularly jeopardised the viability of state banks. He was briefing reporters shortly after President John Agyekum Kufuor and some top ministers held a meeting with Boroness Linda Chalker at the President's residence in Accra.

Official fingures put Ghana's total debt stock at 41.1 trillion cedis at the end of December 2000. Out of this amount 31.7 trillion cedis or $ 5.8 billion was external and 9.4 trillion or $ 1.7 billion was domestic. Mr. Osafo-Maafo said the meeting underscored the need to strengthen the private sector to enable it to play an effective leading role in the growth of the economy..

He restated that government will not relent in its determination to place a special tag on the private sector, saying "Of course, the appointment of a minister solely responsible for that sector is a clear indication. He said Baroness Chalker, who is also Board member of some international groups including Ashanti Goldfields and Unilever International, pledged to further push the determination of those companies to assist Ghana.

Baroness Chalker expressed the goodwill to help attract direct foreign investment into Ghana and also help the government to identify certain institutions that would improve areas such as procurement to ensure value for money. She however asked Ghana to seriously consider the issue of Highly Indebted Poor Countries (HIPC) initiative.

Citing Uganda as a successful country after opting for the initiative she dismissed the nation that it is likely to arm the private sector if adopted. The Government has stated that it would make it's decision regarding the HIPC initiative before its maiden financial policy statement and budget, slated for early next month. We're still looking for some numbers to take that decision, Mr Osafo Maafo said, adding that whatever decision that is taken will be in the nation's interest.

Among those present were the Vice-President, Alhaji Alui Mahama; Mr Jake Obetsebi-Lamptey, Minister for Presidential Affairs, and Mr. J. H. Mensah, Minister and Leader of Government Business. President Kufuor also held discussions with Mr. Abbas Mirakhor, Executive Director of the International Monetary Fund in Ghana.

The talks centered on how the institution could contribute to the revamping of the economy with special focus on reducing poverty as well as improving the general well-being of the people. It was a follow-up to last week's meeting between West African leaders and the heads of the Bretton Woods institution held in Bamako, Mali.