The Minority Leader in Parliament, Osei Kyei Mensah Bonsu has said Ghana could return to the Highly Indebted Poor Country(HIPC) regime if government continues to secure more loans from foreign institutions.
The Bank of Ghana (BoG) indicated that the country’s debt as of August 2014 stood at almost GHC 44 billion.
This is about a half of the country’s value of GHC 85 billion.
[contextly_sidebar id=”TIdSyrEgEKXUGB2H7urrIxLuLjxUgQwh”]Ghana issued a $1 billion Eurobond on Thursday while the Ghana Cocoa Board (COCOBOD) in its latest syndicated loan accepted $1.7 billion from some banks to purchase cocoa beans for the 2014/2015 cocoa season.
The Minister of Finance, Seth Terkper has downplayed worries over government’s continuous borrowing.
But speaking on Eyewitness News, Mr. Mensah Bonsu criticized government’s consistent borrowing, saying “we all know that the GDP ratio is in the region of 58.5 percent and we all know that if the ratio reaches about 60 percent it may reach levels of un- sustainability, we will not be able to pay.”
He said bilateral donors will also be unwilling to pay huge debts that may accrue from government’s borrowing in the future.
“If we are not careful we may be pushing and pulling ourselves towards the regime of HIPC once again. I am not sure the bilateral donors will be prepared to forgive our sin or pay our debts the next time so we should be extremely careful in what we are doing” he said.
Ghana entered the league of Heavily Indebted Poor Countries (HIPC) under the International Monetary Fund (IMF) in 2001 to receive debt relief, low-interest loans and the cancellation of some loans.
By: Marian Efe Ansah/citifmonline.com/Ghana