Ghana and the Federal Republic of Germany yesterday signed a debt cancellation agreement totalling 248 million euros (about three trillion cedis) as part of the benefits of Ghana in striving to reach HIPC-completion point.

Germany had since 1990 cancelled Ghana's debt totalling 500 million euros. Mr Kwadwo Baah Wiredu, the Minister for Finance and Economic Planning signed the agreement for Ghana while Mr Peter Linder, German Ambassador, initialled for his country.

The ceremony, which was the Minister's first official assignment after he took over the new Finance Minister was witnessed by his colleague Ministers from Energy, Local Government and Rural Development, Works and Housing and Food and Agriculture, whose Ministries have directly benefited from Germany's gesture.

Mr Wiredu described the agreement as unique, since all the undisbursed balances after the 31st May 2004 cut-off point would be treated as additional relief to government, when disbursed.

In an answer to a question, Mr Baah Wiredu said Ghana might not be able to stop borrowing from the donor community in spite of the various debts cancellations the country had enjoyed, since "what we generate locally is not enough to cater for our needs".

The German Ambassador, Mr Linder praised Ghana for reaching the HIPC completion point by successfully implementing Ghana Poverty Reduction Strategy (GPRS), which formed the basis of all debt relief activities.

He said as Ghana prepared to revise the GPRS by mid 2005, government should take the opportunity to tackle Public Sector Reform, Public Financial Management and dec entralization.

"The liberalization of fuel prices is also a so called heritage of the actual GPRS to be implemented as soon as possible to put an end to costly and unsocial fuel subsidies", Mr Linder said.

The Ambassador said his country would continue to play its role as a development partner to Ghana, explaining that bilateral negotiations is scheduled in May to decide the next line of Germany's programme of assistance to Ghana.