The Ghana Fixed Income Market saw heightened activity in short-term government securities on April 3, 2025, with Treasury bills accounting for 98% of total trading volume.
A 91-day bill maturing June 30, 2025, dominated transactions, attracting GH¢413.89 million across 4,312 trades at a closing yield of 96.63%. Meanwhile, longer-term bonds and corporate debt instruments saw limited interest, reflecting shifting investor sentiment in a changing rate environment.
New government bonds exhibited mixed performance. A 15-year bond (GOG-BD-03/02/37-A6153) recorded a yield decline of 276 basis points to 22.35% despite GH¢30 million in trades, suggesting cautious optimism in long-term sovereign debt. In contrast, corporate bonds from issuers such as Ghana Cocoa Board and Letshego Ghana PLC registered no transactions, underscoring market reluctance toward non-sovereign risk.
Collateralized repurchase agreements surged, with GH¢2.32 billion in initial settlements and GH¢1.41 billion in completed second-leg trades. This activity highlights institutional reliance on short-term liquidity tools amid uncertain fiscal conditions.
The persistent inversion of Ghana’s yield curve—with 3-year bonds at 32.03% against 15-year bonds at 22.35%—signals investor concerns over near-term economic stability. This pattern contrasts sharply with 2023’s upward-sloping curve and aligns with regional trends. Nigeria’s 2025 Eurobond yields rose to 10.2% this week, while Ivory Coast’s 2032 bonds stabilized at 6.8%, illustrating divergent risk perceptions across West Africa.
The Bank of Ghana’s recent 200-basis-point rate hike, aimed at curbing 28.4% inflation, has redirected capital toward Treasury bills, which fulfilled 72% of the government’s Q1 2025 borrowing needs. However, analysts caution that overreliance on short-term debt risks refinancing vulnerabilities, particularly as delayed IMF tranches and cocoa export shortfalls strain fiscal buffers.
Corporate bond stagnation contrasts with South Africa, where state-owned entities like Eskom saw active trading this week. Ghana’s private sector continues to grapple with borrowing costs exceeding 28%, stifling growth-oriented investments.
While Treasury bills provide immediate liquidity relief, the lack of corporate engagement underscores systemic challenges in balancing debt management with economic expansion. With inflation projections remaining above 20% into late 2025, market dynamics are likely to favor short-term instruments, potentially delaying critical infrastructure financing. Historical data from the 2015 debt crisis suggests prolonged reliance on bills could amplify rollover risks, a scenario policymakers aim to avoid through ongoing IMF-backed reforms.
