Question

To what extent would you agree to the statement that Ghana's debt stock has reached distressing levels despite the fact that the country benefitted immensely from the international debt relief initiatives?

Answer 1

To the level of considerable extent, I agree with the statement, because public debt level of Ghana has increased significantly, and in comparison to it, GDP growth has not increased significantly. It also has not so good debt service done by the government of Ghana. It makes debt level to be unsustainable and it reaches to the distress level in the short run and in the medium run. In this regard, Wold Bank and IMF, both have put Ghana into the category of countries that has high level of distress due to the debt level.

So, even is debt relief measures are taken, the economy is not responding and growing as it should. It makes repayment of debt to the very difficult and country is facing the distress.