The President Kufuor administration decided to seek financial relief through the HIPC initiative in the early days of his administration due to the distressed nature of the economy and the massive debts inherited from the previous government. It drew fierce opposition across the country, including from members of his government and party, to name a few. Even though the Britton Wood institutions supported the decision to sign onto the HIPC programme.
The World Bank and the International Monetary Fund (IMF) established the Debt Initiative for Heavily Indebted Poor Countries (HIPC) in 1996. It built a system for all creditors, including multilateral creditors, to offer debt relief to the world’s poorest and most financially strapped countries, thereby mitigating the constraints that debt accumulation imposed on economic growth and poverty reduction in these countries. The HIPC Initiative was created as a critical component of a larger development architecture that includes policies, programmes, and institutional development to support long-term growth and poverty reduction.
Despite the uproar that this singular decision had caused in the country, with one accord like ants marching to find food for the future, the Kufuor-led government needed to proceed to the IMF and World Bank as a necessary measure because the government could not do much in reducing poverty and stabilising the economy with the skyrocketing debt that had been inherited.
The stage was set, and all eyes were on who would lead the negotiations. To negotiate this historic HIPIC initiative, which was then new to the country, the government needed to assemble a competent team to navigate through these unchartered waters.
Fortunately, Dr Mahamudu Bawumia had returned from his overseas stewardship as an Assistant Professor of Economics at the Hankamer School of Business at Baylor University in Texas (1996-2000) to serve his nation as an Economist at the Bank of Ghana.
In 2001, Dr Bawumia was chosen as the Team Lead for the Bank of Ghana’s technical negotiation team, as well as a member of the government team that negotiated with the World Bank and the International Monetary Fund under the HIPC and PRGF initiatives.
As one of the team leaders, Dr Mahamudu Bawumia was instrumental in negotiating the HIPC proposals. The HIPC initiative gave significant debt relief to President Kufuor’s inherited economy, as well as major rural infrastructure development through the supply of educational and health facilities, among other things.
Dr Bawumia’s vision and love for his country would not allow him to give up until the goal was met. In doing so, he served on the government’s technical negotiating team for the HIPC Paris Club and Completion Point Negotiations. Ghana completed the HIPC process, resulting in significant debt relief totaling nearly $4 billion.
Dr Bawumia’s zeal and competence during that period are worth emulating as Ghana continues to benefit from his ideas. It was unsurprising that Mr Osarfo Marfo, Hon Baah Wiredu of blessed memory, and Governor Paul Acquah, with whom he collaborated on several projects, including the HIPC initiative with President Kufuor’s blessing, strongly recommended him to Nana Akufo Addo to be his running mate in the 2008 general elections.
Dr Mahamudu Bawumia has contributed to the success of all NPP governments, which is commendable.
Dr Yaw Ampofo-Twum
Snr Fellow
Centre for Planning and Economic Research