HIPC helped restore donor confidence in “flat” economy – Kufuor

Declaring Ghana as a Highly Indebted Poor Country (HIPC) in 2001 was significant in putting the economy back on its tracks.

According to then President, John Agyekum Kufuor, the decision was strategic because the economy he inherited was so bad that all donor partners had abandoned Ghana.

“I had come to government with the economy of the state flat on its face; down, and weighted down with debts…we were even described as not credit worthy and no creditors will continue to give us credit lines to run the bus of the state,” he told Daniel Dadzie on the Super Morning Show Monday.

Declaring a HIPC status therefore, gave the government some liquidity to operate because most of the interests that had accumulated were forgiven and “that helped to restore the macro-economic stability” of the state, he added.

Albeit accepting that it was not was not a popular move at the time, Mr Kufuor explained that the administration had only four years to prove that it could govern and being adamant to the fact that the inherited economy was in shambles would have left it worse off.

Interventions

Speaking on some social interventions introduced by his administration, former President Kufuor noted that the National Health Insurance Scheme (NHIS) was one of the essential ones.

He explained that the HIPC status helped create some room for the government to establish the NHIS.

He acknowledged that “not even cabinet could agree” that the government should declare HIPC but it helped and the world of credit opened up to us.

He added that since the administration did not need to find money to pay interest on the erstwhile government’s debts they had enough money to pump into other sectors like Agric.

On cocoa, he noted that they sprayed all cocoa farms for free and also gave fertiliser to the farmers at subsidised rates.

All this was achieved because of the HIPC since that single decision restored the confidence of donors because “when you tell the truth about yourself it brings confidence of others, he stated”

source: Myjoyonline