Offshore investors have cautiously re-entered Ghana’s domestic bond market, driving a 13.85 percent surge in weekly trading activity to GH¢904 million as international funds target shorter-dated securities.
The renewed foreign appetite focused heavily on February 2030 and February 2031 bonds, which captured 61 percent of total turnover in the secondary market. This marked the first significant offshore activity since the country’s debt restructuring exercises, signaling tentative confidence in Ghana’s fiscal recovery.
Despite increased trading volumes, yields climbed across most maturities. The weighted average yield to maturity rose 19 basis points to 16.51 percent, with yields on 2027–2030 bonds averaging 16.7 percent compared to 16.03 percent the previous week.
Databank attributed the market movement primarily to international investors seeking liquid, lower-duration assets that provide exit flexibility. The investment bank noted that offshore demand concentrated at the short end of the yield curve, consistent with global risk appetite trends following Ghana’s recent debt workout.
The foreign participation coincides with improving economic fundamentals that have enhanced sentiment toward cedi-denominated debt. Ghana’s inflation declined to 11.5% in August 2025, marking its lowest level in four years, while expectations grow that the Bank of Ghana could extend monetary policy easing at its September 2025 meeting.
Ghana’s central bank gold reserves reached 36.02 tonnes at the end of August, contributing to a stable macroeconomic outlook alongside attractive real yields that have drawn international interest.
However, market observers caution that offshore volumes remain modest relative to pre-restructuring levels. Sustained foreign inflows will depend on the Treasury’s funding strategy and Ghana’s ability to consolidate its fiscal position as the government prepares larger issuance targets in coming weeks.
Domestic institutions continue driving bond demand, particularly as government securities maintain their preferred status as collateral for repurchase agreements. Databank observed that confidence in these bonds sustains their role in repo transactions among large institutions, providing additional liquidity support.
The Treasury bill market also showed improvement, with September’s first auction achieving oversubscription for the first time in four weeks. Investors submitted GH¢4.39 billion against maturities of GH¢3.69 billion, with the Treasury accepting GH¢4.26 billion.
Yields on 91-day and 182-day bills climbed to 10.42 percent and 12.41 percent respectively, while the 364-day bill eased to 12.97 percent. Databank attributed the outcome to softer issuance targets and improved investor appetite.
Looking ahead, the Treasury aims to raise GH¢8.29 billion at Friday’s auction to settle GH¢8.07 billion in maturing obligations. Analysts expect near-term sentiment to strengthen on continued disinflation, though selective acceptance at auctions and competition from central bank bills may moderate outcomes.
The cautious return of foreign capital represents a crucial test for Ghana’s post-restructuring bond market recovery, with sustained participation dependent on maintaining fiscal discipline and economic stability.
Source: newsghana.com.gh
