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Former Minister of Finance, Seth Terkper has admitted that Ghana has not been declared as Highly Indebted Poor Country (HIPC).
“We have not been declared HIPC because the HIPC programme is virtually wounded up, so, yes, you can say that we’ve not been declared HIPC. That is a fact.” he said .
He said even though the country has not been declared HIPC, John Mahama has point that the country need to pay attention to.
“… The [former] President is saying that: ‘Look at where we stand today’; you can see from the narration that he’s doing. And, by the way, if we are at 77 per cent or we are projected to be at 77 per cent by the end of the year, and, in the first quarter you’re going to borrow GHS5 billion, that will take you above 80 per cent. And, by the way, if we are at 77 per cent or we are projected to be at 77 per cent by the end of the year, and, in the first quarter you’re going to borrow GHS5 billion, that will take you above 80 per cent.” Mr. Terkper said.
The former Finance Minister said even though the country has not formally applied to the IMF, the debt of the country is 77 percent to GDP ration which the country is heading to.
“You go to HIPC by submitting an application, if I may put it that way. So, to the extent that we have not submitted an application, technically, we are a middle-income country, so, let’s put it in context: At the time we went to HIPC, we were a developing country; you measure lower-middle-income countries differently from developing countries. If you want to retain your B ratings and the rest, then you have to be within 55 to 60 per cent [of debt-to-GDP ratio], which is where we were headed. IMF says we’re at 77 per cent.” he noted.
He also added that “The Minister [of Finance], today [Wednesday], was quoting 2019 figures. We’re at 77 per cent of GDP estimated at the end of 2020. Let me give you one example; maintaining an average fiscal balance below 5 per cent threshold between 2017 and 2019, as compared to the average of 6.3 per cent in 2014 and 2016. But here is a minister, who is projecting where we are supposed to be at the end of the year in order that he can make estimates of where the country will be when he submits the quarter for 2021. So, the relevant thing, we know; IMF says we are 77 per cent. His [Finance Minister] own mid-year review says that the deficit is 11 per cent, so, why are we not using, at a minimum, the mid-year review figures?”
Source: Ghana Waves