Liberia: Enhanced Initiative for Heavily Indebted Poor Countries: Preliminary Document

AbstractThe countries in Sub-Saharan Africa (SSA) have experienced a positive growth rate of over five per cent per year, on average, since their transition from the Heavily Indebted Poor Countries Initiative in 1996 and the Multilateral Debt Relief Initiative in 2006. Despite this growth, poverty and inequality are still very high. Employing the Driscoll – Kraay standard panel estimation method and dataset from 1990 to 2015, this paper sets out to examine the implications of external debt and capital flight on the general welfare of the people. The estimation results reveal that both external debt and capital flight have a welfare inhibiting effect, suggesting that increases in external borrowing or capital flight may lead to a reduction in the welfare of the people in the sub-region. The study, therefore, recommends to policymakers and government in the sub-region the need to tackle the revolving nature of external borrowing and capital flight and take steps to halt all channels through which deservingly acquired capital leaves the sub-region.

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The Impact of Government Debt on the Economic Growth of Ghana: A Time Series Analysis from 1990-2015

International Journal of Innovation and Economic Development ◽

10.18775/ijied.1849-7551-7020.2015.25.2004 ◽

2015 ◽

Vol 2 (5) ◽

pp. 31-39 ◽

Cited By ~ 3

Author(s):

Lucy Anning ◽

Collins Frimpong Ofori ◽

Ernest Kwame Affum

Keyword(s):

Economic Growth ◽

World Bank ◽

Negative Relationship ◽

Secondary Data ◽

Government Debt ◽

Ordinary Least Squares ◽

Poor Countries ◽

High Dependency ◽

Heavily Indebted Poor Countries ◽

The Impact

In this study we investigate the impact of government debt on the economic growth of Ghana adopting the methodology of the simple Ordinary Least Squares with data spanning from 1990 to 2015. Ghana has unfortunately found itself in the tragic situation of high external government debt which has led to high dependency on aid and other loans to support its development. These aids and loans have seen the debt of Ghana rise steadily over the years. As a result of the Heavily-Indebted Poor Countries (HIPC) which was presented by the IMF and World Bank in 1999, Ghana was judged to be a HIPC with unsustainable debt enabling the country to benefit from debt relief. We investigate the impact of government debt (both external and domestic) by testing three related models at the domestic and external levels including the general growth of the Ghanaian economy. In constructing our dataset, we build on the study of many scholars including a substantial amount of new materials from both primary and secondary data sources being Ministry of Finance (MOF) or Treasury Latest actual data: Government Finance Statistics Manual (GFSM), Ghana and World Bank. The research findings revealed that there is a negative relationship between debt (domestic and external) and growth in the economy of Ghana and recommend among others that government debt borrowing should be discouraged while increasing the revenue base through tax reform programs is encouraged.

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Somalia

IMF Staff Country Reports ◽

10.5089/9781513538327.002 ◽

2020 ◽

Vol 20 (86) ◽

Author(s):

Keyword(s):

Low Income ◽

Net Present Value ◽

Debt Relief ◽

Debt Management ◽

Policy Framework ◽

Low Income Countries ◽

Debt Sustainability ◽

Poor Countries ◽

Heavily Indebted Poor Countries ◽

Hipc Initiative

This paper presents an assessment of Somalia’s eligibility for assistance under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The macroeconomic framework reflects the policy framework underlying the proposed three-year Fund-supported program. The debt relief analysis (DRA) remains largely unchanged, but some of the underlying debt data has been updated to reflect new information from creditors. In addition, this paper presents an assessment of debt management capacity in Somalia and a full Debt Sustainability Analysis under the Debt Sustainability Framework for Low-Income Countries. The DRA reveals that, after traditional debt relief mechanisms are applied, Somalia’s debt burden expressed as the net present value of debt-to-exports ratio is 344.2 percent at the end of December 2018—significantly above the HIPC Initiative threshold. Despite the challenging environment, progress on reform and policy implementation has been good and sustained reforms have translated into economic results. In addition to the coordinated support from the World Bank and the IMF, reforms have been supported by other development partners.

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