Dr. Ernest Addison appointed on short term Senior Research Fellow with Harvard

After eight years at the helm of affairs at Ghana’s Central Bank, Dr. Ernest Addison retired from the Bank of Ghana in March 2025. This was a period marked by a succession of exceptional situations, global liquidity with negative interest rates, the global pandemic, the invasion of Ukraine. As Francois Villeroy de Galhau, the recently retired Governor of the Bank de France said, the period was anything but stable. “For us Central Bankers, deeply held convictions were tested, we faced repeated shocks, a period which could be described as anything but chaotic, leading to slowing growth and rising debt”.

In the first half of his tenure the Bank made major contributions to creditworthiness assessments  of the country and which in the context of excess global liquidity allowed Ghana gain access to the international capital markets. Indeed one of the rating agencies that signaled strong confidence for global investors singled out monetary policy with particular emphasis on major reforms of Ghana’s financial sector. By the year of the pandemic, Ghana had become the fastest growing economy in Africa with inflation on a downward trend. Dr Addison was awarded the Sub Saharan Africa Central Bank Governor of the year by Global Markets in that year. It cited the tough measures undertaken by the Central Bank which had delivered good prospects. Ghana had aggressively cleaned up its financial sector with the resolution of 9 banks and 347 other financial institutions. Ghana had put into place a Basel III capital requirements framework and built its staff supervisory capacity. By the time the pandemic hit, the country had well capitalized strong banks with strong buffers. Ghana came out of the pandemic with much stronger growth than many other countries due to the shrewd measures implemented to minimize the impact. A more disciplined management of the economy, and earlier tighter monetary policy had created the monetary policy space to allow a loosening of its instruments.

If the successes of the first half of his tenure had been aided by access to global capital markets, the second half was also challenged by lack of access to the same global markets in the context of significant debt build up which had helped ramp up growth. Fiscal policies weakened and the country suffered credit worthiness downgrades that effectively shut it out of the capital markets triggering a major liquidity and debt crisis. Working with its international partners, the Government put into place major corrective measures including a Debt restructuring programme which was politically challenging but effective in creating the necessary fiscal space to return the economy back to stability.

Governor Addison will take students through the policies that propelled the economy to high growth rates, focusing on the macroeconomic policies and financial sector cleanup up. It will also address the issue of repeated shocks, the pandemic, and its policy responses and the Russia Ukraine shock. A  session will be devoted to an economy in crisis, its manifestations, the role of the central bank and the return to an IMF programme, concluding with the frontloading of corrective measures in 2023 and 2024 and the foreign exchange buffers that were created through the innovative Domestic Gold Purchasing programme which allowed the exchange rate assumptions underlying the Debt Sustainability Analysis done for Ghana to adopt a path very different from the original assumptions and has led  to a much appreciated domestic currency and a faster convergence towards the debt sustainability thresholds under the Ghana IMF programme.