Two-thirds of Ghana's debt to be written off

Finance Minister, Yaw Osafo-Maafo has disclosed that two trillion cedis of Ghana's external debt will be written off by July this year. The amount, which constitutes two-thirds of Ghana's bilateral debt, will be confirmed in June during a meeting between Ghana, the IMF and other donor institutions.

Mr Osafo-Maafo said this in an interview with newsmen at the Kotoka International Airport (KIA) on his return from Washington and London where he attended a spring meeting of the IMF and the World Bank.

The Minister for Government Business, J.H. Mensah, accompanied him. The Finance Minister said he discussed with the IMF and the World Bank how to close the gap of Ghana's budget deficit, which stand at 2.6 trillion cedis this year. He said the two Bretton Woods institutions agreed to hold a mini donor Conference on Ghana in Accra on May 23 to solicit for funds and support.

According to Osafo-Maafo, Ghana needs a lot of inputs from her development partners to get out of the difficulties adding that though it takes a long time to get relief under the HIPIC Initiative, he hoped that by December Ghana will reach the decision point.

"The IMF and the World Bank will meet and measure up performance and decide whether we have a good track record to trigger off the decision point", he added.

The Finance Minister said there is the need for improvement in revenue generation and called for a review of the service fees charged by ministries, departments and agencies.

He called for a check on capital flight which he said is not encouraging developed countries as it impacts negatively on the economy. Mr Osafo-Maafo said the IMF proposed an upward adjustment of the VAT which, the delegation rejected and argued that they would rather make up with improved revenue collection.

Mr. H Mensah on his part said the NPP government will keep to its promise of delivering better management and discipline in handling the economy. He said that though the country's problems looked insurmountable, we are now beginning to find solutions to them. " We are on course and steady and we will surprise those who are skeptical.

The stabilization of the cedi now shows that the economy is being managed well. What we have to do now is to work harder as a people to enhance development", he said.

Mr Mensah said "we cannot ask others to help us when we cannot help ourselves, since it is a precondition for asking for assistance". He said Ghana now enjoys a lot of respect and goodwill on the international front adding, "this augurs well for our development".