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The former Finance Minister, Seth Terkper, has questioned the legacy Ghana is leaving following news that eurobond holders will forego about $4.7 billion owed them by the government.<\/p>\n
Speaking on JoyNews\u2019 PM Express, he explained that to some extent this debt forgiveness will ease a bit of the stress on the economy and facilitate the release of the subsequent IMF funds.<\/p>\n
However, Mr Terkper said that despite this upside he had mixed feelings about debt forgiveness noting \u201cWhat legacy are we leaving? As a country, HIPC was total debt forgiveness, within two decades of default, and here we are being forgiven again.<\/p>\n
\u201cIs this a legacy that we want for Ghana? I say this with some regret and confidence in the fact that this was envisaged when we discovered oil.\u201d<\/p>\n
He disclosed that the NDC government had anticipated the possibility of a debt default and the possibility that without certain measures in place, Ghana \u201cwould continue slipping\u201d.<\/p>\n
As such the government had put in place measures to prevent, but things have not gone as planned, Mr Terkper noted.<\/p>\n
\u201cSo when we discovered oil, there was a one-and-a-half-year debate as to what to do with oil, and we pledged both sides. One, we said never should we allow cocoa and gold prices to go up, then we are happy, go down, and then it\u2019s all tears\u2014stabilisation fund. We said if the stabilisation fund is going high, we could cap it, use it for two purposes \u2013 contingency fund.\u201d<\/p>\n
\u201cThen you come to the sinking fund, that\u2019s for debt repayment\u2026because you can\u2019t just keep borrowing. We (the NDC government) had used approximately $350 million to take off President Kufuor\u2019s first bond.<\/p>\n
\u201cAnd then we left $250 million and $200 million was used by the current government to pay off the balance. And we did a debt restructuring backed by the World Bank Guaranteed Bond, which is now impaired.<\/p>\n
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