June 21, 2005
Reacting to the momentous decision by the G8 to rid Ghana and 17 other African countries of their crippling foreign debt for good, President Kufuor noted that “We opted for the HIPC Initiative in 2001 to allow us breathing space to recognize our priorities and this is the reward.”
In 2001, the term HIPC was derisive in Ghana because some reasoned that it was too much of a put down. Ghana was too proud a country to be labeled as such. We had gold. We had rich resources. We couldn’t possibly be described as “HIPC,” meaning a Heavily Indebted Poor Country.
True, we had rich resources and still do, but the facts on the ground were different in 2001. We had been broke for a long time. Only hubris – excessive pride, prevented us from realizing that we were broke.
The previous administration had to put up appearances and was aided amiably in the ’90s by the World Bank, which was desperate to describe Ghana as a success story. It was only after the Kufuor Administration came to power that the truth became glaringly apparent.
On Saturday June 11, 2005, G8 finance ministers agreed on debt relief for 18 HIPC countries in Africa and others. The World Bank, the IMF, and the African development Bank would forgive the debt owed to these countries. The next 20 countries on the list “could qualify for debt cancellation if they meet targets for good government and corruption-fighting,” the G8 said.
It will help to note that the debt forgiveness came close on the heels of June 4 celebrations in Ghana: the remembrance date of the coup by Flt. Lt. JJ Rawlings and cronies in 1979.
After much bloodshed aimed at getting mostly our government and financial affairs in order, we still arrived at this debt relief without a gunshot. Then you will wonder what June 4 was all about!
Describing the debt forgiveness on PBS’ Jim Lehrer News Hour television show in the US, Professor George Ayittey of Free Africa Foundation said the package is “a step in the right direction.”
“Everybody knows that Africa is in a very deep crisis” Ayittey said, but “it doesn’t address Africa’s long-term fundamental needs and how to put Africa on the right track to development. What Africa needs to do is to grow out of debt. What this does is simply stabilize the situation.”
Indeed, the economic platform has been stabilized. The rest is up to us. It is time for take-off.
While others saw derision in the “HIPC” designation, Kufuor was quick to recognize the opportunities presented by it. The Economist, describing the opportunities said, “In total, the agreement could be worth more than $55 billion” for Africa.
Of this amount, some $4.1 billion dollars will accrue to Ghana’s coffers. Now, there is not much to deride about this big windfall. There is cause for celebration – and laughter – all the way to the bank.
But caution. We may be celebrating too early. Misery dies hard and some may not find pleasure in the debt forgiveness.
Some may even be disappointed that it has happened; that it didn’t happen on their watch. After years of grousing about the mismanagement of our affairs, they will not sit still for someone to spoil their disgruntlement!
And then, there would be some who could spoil this sudden windfall in a different way. They would abuse the treasury, or give reasons for the cries of mismanagement to continue and the “Wahala” matches to persist.
Ghana has a fairly decent government now. That’s what the debt forgiveness grant recognized and therein lies the achievement that has to be applauded; the lifting of this heavy debt burden from the nation’s shoulders.
During the Acheampong regime in the ’70s, he recognized the injustice inherent in the debt burden. In a simple way, which allowed no intellectual explanation, Acheampong said in the vernacular, “Yen tua” meaning “We won’t pay!”
George Ayittey followed in the ’90’s with the missing intellectual explanation. He described the debt as “Odious Debt” and went on to explain why. His argument was sound intellectually and ethically. But, of course, the professor was not in a position to cancel the debt – or refuse payment on behalf of the nations of Africa. It would take a political decision to do so.
It was Kufuor’s turn to unravel the puzzle that was the debt burden. Rather than simply saying “Yen tua” he took a chance on the confluence of events that made the debt forgiveness possible. His decision in 2001 has resulted in a 100% forgiveness of debt – the biggest in Ghana’s history and a proud legacy for him.
Kufuor’s election victory in 2000 and re-election in December 2004, “marked the country’s first-ever democratic transfer of power” in Ghana, an American newspaper remarked.
On the recent visit to Washington to accept the debt forgiveness package, Kufuor appeared in the White House with George Bush; along with Presidents Pohamba of Namibia, Guebuza of Mozambique, Mogae of Botswana, and Tandja of Niger.
“We believe by removing a crippling debt burden, we’ll help millions of Africans improve their lives and grow their economies,” Bush said. The United States, by the way, is the biggest economic aid giver to Africa in the world.
In describing the efforts the five African presidents have made to earn the package, Bush also said “these leaders have made (a strong statement) about democracy and the importance of democracy on the continent of Africa.”
For our pride, Ghana has been mentioned or spotted on the forefront of the fight for democracy in Africa. Of course, one can argue that Ghana is not a stronghold for democracy yet, but one cannot deny that it is certainly on its way to become one.