ISODEC in favour of HIPC

The Integrated Social Development Centre (ISODEC), a non-governmental organisation, on Wednesday said Ghana should opt for the Highly Indebted Poor Countries (HIPC) initiative and mount a campaign for Structural Adjustment Programmes to be extricated from it.

The campaign will simplify procedures, speed up HIPC and result in deeper and faster debt relief for the country, Mr Charles Abugre, ISODEC Executive Director, said at a press conference in Accra.

The press conference was to state ISODEC position in the current debate on whether or not Ghana should opt for HIPC.

Mr Abugre said Ghanaians could not run away from the fact that "we are highly indebted and extremely poor."

This is evidenced by figures that show that about 40 per cent of the average Ghanaian family of six cannot afford 7,000 cedis a day to feed and educate their children.

Mr Abugre said: "One of the most encouraging outcomes of the public discussions is the extent to which Ghanaians value their independence and autonomy and abhor external conditionalities.

"This is healthy. Unfortunately,...it is not HIPC per se which is the source of the conditionalities but the country itself has been a candidate for a host of IMF/World Bank conditionalities."

Mr Abugre emphasised that HIPC will not negatively affect Ghana's credit rating because it is not a default mechanism. Neither is it a rescheduling mechanism nor a debt discounting mechanism.

It is more or less a buy-back mechanism where bilateral creditors and donors contribute some money and the World Bank some of its profits into a trust fund, he said.

Mr Abugre said there is no evidence that countries like Uganda who have benefited from HIPC I and II have had their credit ratings reduced.

"Rather, HIPC debt relief, especially if it is front-loaded and deep enough, acts to improve a country's risk assessment."

He said problems related with HIPC include inadequacy of debt relief effort and cumbersome and unnecessary procedures that slow the procedures.

"We should, therefore, provide positive but critical support to HIPC, underscore in particular the comprehensive approach to debt relief and the culpability of the ifs," Mr Abugre said.

He also maintained that Ghana should mount a campaign for SAP and protest Japan's call on Ghana not to join HIPC.

"We should redirect our fire on conditionalities to the IMF, the World Bank, the United States and the G7 (the world's richest countries)," the Executive Director added.

HIPC, an approach to debt relief for poor countries, was established in 1996