“We move forward not backwards”

Wishing you weren’t a HIPC (highly indebted poor country) sadly doesn’t make it so.  Ghanaian officials seem to have read a few too many self-help books.

Here’s some background from a 2012 working paper by Todd Moss and Stephanie Majerowicz entitled No Longer Poor: Ghana’s New Income Status and Implications of Graduation from IDA.”

Ghana has long aspired to reach middle-income status. The Government’s Vision 2020 plan launched in 1995 targeted higher growth rates for the country with the aim ‘to transform Ghana from a low-income to a middle-income country within one generation.’  In November 2010 the country reached this milestone a decade early through a somewhat unconventional and in many ways unexpected way: a technical statistical adjustment. While Ghana’s real GDP growth rates had, according to the World Bank, steadily improved over the previous three decades—from 1.4 percent in the 1970s to 5.5 percent for the past decade—a GDP rebasing exercise recalculated how to measure the economy and Ghana suddenly found that its official GDP per capita was not under $800 as previously thought but rather $1,363. This accelerated leap put the country into a new income category overnight.

The joy of reaching middle-income status (albeit by technical shenanigans) was short-lived, as Ghanaian officials realized that the country was no longer eligible for the amount of aid that it had been (the day) before.  Now the country is undergoing the indignity of being officially classified by the World Bank as a Highly Indebted Poor Country (HIPC).  This was after the IMF had already labeled it a “high-risk, debt distress country.”  I’ve never heard of that classification but it certainly doesn’t sound good.

So what do officials have to say?

“Deputy Finance Minister, Mona Quartey in June ruled out the possibility of Ghana going back to HIPC status. We are not going to HIPC. We are going into a three-year IMF programme. We have been there [HIPIC] once and we are not going back there. ‘We move forward not backwards’ she encouraged, saying Ghanaians should “declare and decree” positive confessions.”

I don’t even know what “declare and decree” positive confessions means in this context, but I think the facts take issue with her assertion that “we move forward not backwards.”