AFRICANEWS

Ghana

Call for debt relief heats up

The Ghana chapter of Jubilee 2000 Coalition, the group calling for the cancellation of Africa's external debt has been formed. Behind the glamour of seeing the debt written off is the need to change the current trade relations to ensure that the continent does not fall into debt again.

Participants at the launch on July 14 of the Ghana branch of Jubilee 2000 Coalition agreed on the need for re-launching the continent's development efforts at the start of the new millennium. The participants shared the opinion that the cancellation of the debt per se is only a short term solution to the poverty situation in Africa. Instead long-term measures must be put in place to ensure that the continent does not get into debt again once they are able to get the debts written off.

"The campaign for the Debt Cancellation can only be meaningful if we are equally concerned about the economic policies and decisions of our leaders that lead to debts and take measures to ensure that we do not fall into debt only a few years after debt cancellation," said the co-ordinator of Ghana Jubilee 2000 coalition Akoto Ampaw.

"Our demand as Jubilee 2000 Ghana, is cancellation of Ghana's, and indeed countries of African and third world's external debt by the year 2000 that is, the beginning of the next century and millennium", he added. Also, for debt cancellation to achieve its intended purposes, civil society will have to monitor how governments use what will be freed from debt cancellation and how future loans are contracted.

Rt. Rev Charles Palmer Buckle, Catholic Bishop of Koforidua, 70 kilometres north of the national capital, Accra, gave four reasons why Jubilee 2000 is justified in asking for debt cancellation. First he said that the calling for debt cancellation is a call for social justice, because the debt "is simply un-payable. It is impossible to pay, especially given the conditions attached to these loans", he added. His second reason is that the debts owed to developing countries are simply not needed by the creditor nations for their survival and thirdly these debts have been paid through debt servicing. Lastly he intimated that the debts were contracted under unethical terms.

Rt Rev Palmer revealed to the audience that the 38 richest people in the world have more property than half of the world's population. "Never in the history of the world has the world been so rich and yet there is so much poverty," he said.

The campaigners who intend to collect two million signatures world-wide to push their demands justified the cancellation of the huge external debts saying it can give developing countries the necessary breather to reorganise their economies.

African countries would like to see their external debt, estimated to be over $300 billion - cancelled, the gesture would not yield any positive results unless and until it is accompanied by a dramatic reshuffle of global economic policies and a change of the current unfair trade relations.

Professor Akilapah Sawyerr, former vice-chancellor of the University of Ghana, linked the debt issue to the current unfair trade relations in which developing countries provide raw materials at low prices while developed countries supply finished ones at very high prices. With such a status quo he said: "The answer is not just debt cancellation but total transformation of the situation which creates debts, which brings in more debts. We borrow more moneys or beg for money in order to service debts." He revealed that as far back as 1960, 70 per cent of Ghana's earnings on gold were spent on servicing debts. He said that in 1997, for instance, Ghana received grants totalling $566 million but paid loans to the tune of $578 million meaning the country had to use its own resources to service its debts.

Another aspect of the crisis is the interest rate of four-fold increase on the debt interest.
With rescheduling and new borrowing form 1976 to 1996, Ghana's debts now stand between $5.6 and $6.6 billion and it is increasing annually. "As the situation stands now, third world countries including Ghana can never pay the debt. We cannot pay all these debts, it is impossible" Akilapah declared. Prof Swayerr also castigated Debt Rescheduling, a system which allows a country to borrow from official circles at a low rate to service debt, saying that was not in any country's favour. "This kind of bailout by the banks led to crises in Mexico and Brazil in 1980", said the former Law lecturer.

Ampaw said the call for debts cancellation has a long history in Ghana and dates back to independence time in 1957 when the first President of Ghana, Kwame Nkruma spoke of the unjust neo-colonial economic order that is designed to impoverish the people of Africa. Ampaw also recalled Ghana's second democratically elected President Kofi Abrefa Busia's "Kafo Didi' campaign (literally meaning "even a debtor eats"), as well as Kutu Acheampong's "we won't pay" stand that was strictly adhered to from 1972 to 1979 during the period of his military rule.

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