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Tunis, 1st December 2004 –The Boards of Directors of the African Development Bank (AfDB) and the African Development Fund (ADF) today agreed that Ghana had effectively met the conditions and reached the completion point under the enhanced framework of the Heavily Indebted Poor Countries (HIPC) Initiative.
The Bank Group will, as a result, provide irrevocable debt relief of US$ 131 million in net present value (NPV) terms to the country. Ghana will be released from up to 80 percent of annual debt service to the Bank Group until the entire amount is delivered sometime in January 2013. In practical terms, its 2004 debt service obligations, for example, will fall from about US$ 25.15 million to about US$ 5.03 million.
To reach completion point, the government had to fulfill three key conditions:
- Completion and satisfactory implementation of its agreed Poverty Reduction Strategy for at least one year;
- Maintenance of a stable macroeconomic environment, as evidenced by satisfactory implementation of an arrangement under the International Monetary Fund’s Poverty Reduction and Growth Facility (PRGF);
- Implementation of major structural and social reforms, particularly in Governance, Education, Health, decentralization and the Energy sector.
The Boards of the ADB and ADF noted that all twelve but one of the completion point triggers have been successfully met. The government has in particular adopted in February 2003 a poverty reduction strategy paper designed to promote growth, incomes and employment, improve service delivery for human development, and improve governance and public sector management.
The Boards highlighted the fact that most of the quantified targets to promote growth, incomes and employment improved over their corresponding 2002 levels. To improve the business climate, for example, Ghana has completed the automation of customs procedures at its principal seaports in 2003 and modernized the registration process of new businesses. Progress was also made in the area of Governance. The Act to establish a national procurement system and eliminate the various shortcomings in the public procurement process was passed by Parliament in December 2003.
Ghana is the 11th Regional Member Country of the Bank to reach completion point under the enhanced HIPC Initiative. Debt relief from the ADB Group to the country since February 2002 when it reached decision point – the first stage in the HIPC process – amounts to US$ 49.07 million in NPV terms,accounting for 32.93 percent of total debt relief for the country.