Is Ghana in debt distress?

Ghana's economy has been a subject of scrutiny recently, particularly in relation to its debt levels and economic policies. At the virtual launch of the African Economic Outlook, the Governor of the Bank of Ghana, Ernest Addison, addressed concerns about the country's debt-to-GDP ratio. Despite acknowledging that Ghana has a fairly high debt level, Addison emphasized that the country is not in debt distress. He attributes Ghana's ability to access international capital markets as a testament to the quality of economic policies that have been implemented. Addison highlighted the transformation that Ghana has undergone over the years, citing the country's ability to borrow from international markets as a result of sound policies put in place between 2003 and 2007. These policies not only allowed Ghana to tap into international capital but also attracted capital inflows into its domestic bond markets. The Governor pointed out that in the last three years, Ghana has focused on maintaining good fiscal and monetary policy, ensuring low inflation rates, and stable exchange rates. This commitment to economic stability has generated significant growth, with the country's GDP increasing from 3% to over 7%. Furthermore, Ghana had reformed its financial sector, leading to a strong economic position by the end of 2019 with low inflation and access to international markets. However, the unforeseen COVID-19 pandemic disrupted Ghana's progress, causing inflation levels to rise to 10.4% and the fiscal deficit to widen to 12%. Despite these challenges, Addison remains optimistic about Ghana's economic resilience, emphasizing that the country is not in a state of distress.