Ghana’s sovereign bonds were already trading distressed prior to Russia’s invasion of Ukraine, the Africa Development Bank’s 2023 Africa’s Macroeconomic Performance and Outlook has revealed.

This it said was due to fiscal concerns and widening spread which has expanded further by more than 1,500 basis points since August 2022.

The report said the debt vulnerabilities are likely to linger as countries such as Ghana continue to grapple with the economic shocks from the COVID-19 pandemic and Russia’s invasion of Ukraine. 

At the end of September 2022, 23 African countries were either in debt distress (8 countries) or at high risk of debt distress (15 countries), up from 20 in 2020’ it added.

“Debt vulnerabilities in many of Africa’s debt-distressed economies preceded the pandemic. Strikingly, these vulnerabilities have increased over time and since 2020 have been exacerbated by pandemic-related effects. These vulnerabilities have increased since 2016, with more countries progressively sliding into debt distress or high risk of debt”.

Furthermore, the report pointed out that since January  2022, all 23 countries that were either in debt  distress or at high risk of debt distress recorded an increase in sovereign spreads of more than 700 basis  points. 

The announcement of interest rate hikes by the US Federal reserve in July 2022 led to sharper increases of more than1,000 basis points in some countries, highlighting increased debt vulnerability.

Persistently tight global financial conditions pose the threat of more countries sliding into debt distress or high risk of debt distress.

Ghana's public debt hit ¢467.4bn in September 2022

Ghana’s public debt hit ¢467.4 billion at the end of September 2022.

This pushed the country’s debt to unsustainable levels.

Prior to that the country had announced in July 2022 that it was seeking an International Monetary Fund-support programme to help stabilise the economy.