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The Bank of Ghana's foreign investment survey for 2008 found significant foreign inflows, over half of which were FDI, and the rest trade credits and loans. Even FDI had a high debt component (62%). FDI equity concentrated in three sectors: transport, storage and communication; banking; and mining. It came mainly from Europe (60%) and Africa (38%). Portfolio equity investment remained low, and mainly in mining and transport. The survey also tracked an increase in investment by Ghanaian residents abroad.
Inflation was found to have the strongest negative effect on doing business, by labour market rigidities. Positive factors were domestic market size; access to finance and credit; and efficiency of banking, telecoms and internet services. Businesses gave strong signals to expand their activities over the next three years.
The IMF and IDA have published their latest annual HIPC and MDRI Status of Implementation report. In the last year, three countries reached completion point (Burundi, Central Africa Republic and Haiti) and two countries (Cote d’Ivoire and Togo) reached decision point, making a total of 26 (out of 40) countries which have now reached their completion points countries, with a further 9 countries being past their decision points.
For more details, go to www.imf.org/external/pp
The report also notes the progress in debt relief provided by commercial creditors and a reduction in the number of HIPCs’ authorities being sued, from 33 to 14 cases in the past year. However, progress in relief from non-Paris Club creditors has been limited.
For more information, see www.imf.org/external/np
The IMF’s review of the Debt Sustainability Framework (DSF), its analytical tool for conducing debt sustainability analysis (DSA), recommends the following:
- More account to be taken of the impact of public investment on growth in DSAs,
- Increased consideration of remittances in the determination of debt distress ratings,
- Reducing the ‘threshold’ effects of changes in CPIA ratings,
- Lowering the DSF discount rate from 5% to 4%,
- Appling greater flexibility in treating state-owned enterprise external borrowings,
- Taking more account of Government’s views in DSA documents.
For more information go to www.imf.org/external/np
The Fund has proposed a new matrix-type framework for determining borrowing limits in Fund programmes. Instead of the one-size fits all approach, the Fund proposes that nonconcessional borrowing limits reflect low income countries’ capacities, as measured by its CPIA rating, and its external debt distress rating resulting from the DSF DSAs.
For more information go to www.imf.org/external/np/pp/en
Three, of the eleven students participating at the recent HIPC CBP Distance Learning Residential Workshop, completed their programmes with distinctions.The residential workshop was held for participating MEFMI and WAIFEM countries. The residential workshop for the CEMLA and Pole Dette workshops will take place in the next two months. See more information on the HIPC distance learning programme
