- The post-Heavily Indebted Poor Countries (HIPCs) have been asked to shy away from accessing too many non-concessionary loans from development partners so as to avoid a return to their former status.
A Senior Economist at the State Secretariat of Economic Affairs in Switzerland, Dr Nicola Guigas, advised post-HIPCs to avoid the temptation of accessing more loans after benefiting from debt relief.
Dr Guigas, who addressed the 19th steering committee meeting on capacity building for HIPCs in the Ghanaian capital Accra, said too many loans, especially non-concessionary ones, were difficult to manage for the right investment, which would also make it difficult to be paid back.
“Poor countries should be prudent in the management of non-concessionary loans,“ Dr Guigas said. “Non-concessionary loans are given to sovereign states with commercial interest as opposed to concessionary loans which do not attract interest.”
The meeting has brought together economic experts from HIPCs and post-HIPCs, donor countries and development agencies, to help build the capacity of HIPCs in the management of the benefits of the HIPC initiative for economic progress.
It also aims at developing strategies for prudent financial management for poor countries.
The HIPC initiative is an international response to the burdensome external debt owed by the world’s poorest and most indebted countries originating in 1996 as a joint undertaking of the World Bank and the International Monetary Fund.
Participants were drawn from Ghana, Tanzania, Guinea-Bissau, Burkina Faso, Cameroon, Ethiopia, Paraguay, Guyana, Nicaragua, Ireland, Sweden, Switzerland and Canada.
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