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So where did the HIPIC fund go? In 2001, the Kufour administration decided to join the Heavily Indebted Poor Country (HIPIC) initiative.It was the new framework for multilateral partnership for development under the poverty reduction strategy papers (PRSPs). The government of President Kufour between 2002 and 2005 received huge funds under this arrangement for poverty alleviation. Have we critically scrutinised to know the funds we accrued under the initiative? Dr Bawumia during the campaign, always chastised the Mahama administration over excessive borrowing and he mischievously embarked on this crusade without telling Ghanaians how much of the loans went into developmental projects and the medium to longterm benefits the nation stands get from such investments. He and his crusaders deliberately failed to tell us whether the projects and other investments made could pay back the loans.
The total debt relief under the enhanced HIPIC initiative from all Ghana’s creditors amounted to US$3.5 billion in nominal terms. This assistance was equivalent to reduction in net value at the time of US$2.2 billion as was agreed at the decision point. Ghana qualified under the fiscal criterion and the debt relief was calculated to bring (NPV) at the time, of debt- to – government revenue ratio down to the HIPIC threshold of 250 percent. IDA provided debt relief under the enhanced HIPIC initiative which amounted to US$1.4 billion in debt service relief. The IMF provided debt relief of US$112 million in NPV terms of payments falling which due the IMF during 2002 to 2009. The remaining bilateral and multilateral creditors also provided share of relief required under the enhanced HIPIC initiative. In addition to all these reliefs many creditors provided additional relief beyond the HIPIC initiative which totalled above US$500 million. It was projected that Ghana would save approximately US$230 million annually between 2004-2013 in debt service cost. What happened to that projection? Why couldn’t Ghana achieve that target but rather saddled itself with huge internal and foreign debts including the famous ToR debt?
We were told by handlers of the economy then that debt relief together with the bilateral assistance beyond HIPIC relief will lower Ghana’s debt-to- export ratio to 84 and its debt-to- government revenue ratio to 130 percent in 2004. Did we achieve that? No. So what caused the hitch? It is unfortunate people who understand these issues are not asking the relevant questions but are quick to comment on lies fed them by Bawumia and his propaganda team. Have they studied Ghana’s poverty reduction strategy paper. The GPRS had five strategic pillars, macroeconomic stability, production and employment, human resource development and special programmes for the vulnerable and excluded and the last, governance. Bawumia should tell us why we could not meet our projections in all these areas. Where did the GHC 700 billion go? The $250 million for poverty alleviation, the $25 million etc. By the way, the worst unemployment figure was recorded under the NPP in 2005 and the best, recorded under John Mahama. The proportion of the population living in poverty fell from 51% to 39 percent under the NDC 1 administration and under John Mahama, Ghana was rated the best in human development index.
Can Bawumia tell us how the Npp administration allocated the HIPC funds and the extent to which poverty was reduced? Their administration allocated the funds without clearly stating transparent guidelines. And Osafo Maafo who is making noise around should tell us how the funds were allocated. Disbursements were made at the discretion of ministry of finance. Government did not prepare Budget for it and expenditure of the HIPC funds was done without prior approval of Parliament contrary to the relevant provision stipulated in the constitution. They did not account for the expenditure of HIPIC funds to Parliament, neither did parliament exercise its monitoring and oversight powers.
These are the issues we must focus on to avoid their repetition. Can the NPP point to one major project Ghana benefited from the HIPIC initiative? What did they do with all the relief space it enjoyed throughout the period? Between 1982- 1986, under the PNDC administration, Ghana cleared about 90% of debt it owned its creditors. The administration achieved this enviable fit because of policies it implemented. It did not create fiscal space for more borrowing, did not issue bonds to clear debts for more borrowing and did benefit from the reliefs the NPP administration enjoyed. The last NDC administration followed same path. It went to the IMF to instill discipline into management of the economy and introduced measures to clear our debts without adding more debts. Certain state institutions were made granted permission to borrow at their own strength. We saw the massive developments recorded under the administration. Many of these projects including the business outsourcing centre, the hospitals, expansion of the ports, the railway, the roads, the housing projects apart from its social economic benefits will inject money into the economy to clear funds borrowed to implement them.
Without modern road network, doing business in Ghana will remain prohibitively expensive and logistically challenging. Our intellectuals and economists know this but kept quiet for Bawumia and his NPP to deceive Ghanaians with that evil jargon that “we don’t eat road”. Under Mahama, previously abandoned projects were completed and previously notorious roads were repaired. These repair works and construction of new (roads) reduced travel time and we know the economic benefits of swift movement across the country. What about power generation (electricity). Instead of focusing on improving what they inherited, the Akufo-Addo administration has paid millions of dollars to a cousin of the President to review all energy contracts. The previous administration increased generation from the point it inherited. This administration has started selling our excess power to Burkina Faso and as at now we don’t know how anything about this arrangement. The Mahama administration kept faith with the roadmap to power sector reforms.
We shall delve deeply into these issues but before then, look, we must always praise the Mahama administration and the former President and show him gratitude for taking us to the level he left. The neocolonial concept has raised its ugly head on the continent and that is one dangerous phenomenon we must monitor closely. Those who think losing an election means bastardise your policies and programmes and hail populist policies of your opponent must thread carefully.
Occupy Nigeria was formed by some elites in Nigeria as part of the change agenda. Occupyghana was formed in Ghana by some middle-class citizens to frustrate the Mahama administration. Corruption propaganda was pushed in Nigeria and was pushed in Ghana and Kenya, free secondary education was pushed almost all the opposition parties on the continent. All the promises the opposition parties made in Africa were the same. The other strategy was investing in the media and the judiciary to frustrate the incumbent. Attack opposing voices and threaten them openly. Intimidate the ruling parties and warn them of possible clashes if you are declared losers. These were the tricks all the opposition parties in Africa adopted as part of their change agenda. Fortunately for Kenya and the Uhuru administration, it was briefed properly uabout how these opposition elements operate so was able to successfully curb their agenda.
We must find out why the Nigerian foreign affairs minister Geoffrey Onyeama said “upon his first meeting with Mahama, and after interacting with him, he realised that Ghana was lucky to have Mahama” and why he described him as “RAZOR SHARP INTELLECT”. We should also find out why the former world bank president Jim Yong Kim, said “He[President Mahama] is very committed to undertaking the reforms that he knows, and we [world bank] know that he’s got to undertake” and why he has been rated among the most admired leaders in the world.
Source: Ohenenana Obonti Krow