Government of Ghana Treasury yields have declined significantly in 2025 due to a coordinated fiscal strategy focused on reducing borrowing costs through disciplined spending and improved fiscal governance.
In response to sustained investor demand for T-bills, the government introduced interest-saving measures aimed at minimizing future refinancing costs.
Consequently, the yield on the 91-day Treasury bill declined from 15.65% in the first auction of April to 15.23% by the May 2nd auction, representing a significant 42 basis point contraction. The 182-day bill also saw a 72 basis point drop, settling at 15.78% over the same period. Notably, the May 2nd adjustment marks the most pronounced rate cut since mid-March.
This downward repricing of yields is reshaping market dynamics. The compression in rates has triggered signs of capital flight from the T-bill market, as evidenced by undersubscriptions in recent auctions.
Investors, facing diminished real returns, are increasingly reallocating capital toward higher-yielding asset classes such as equities, corporate bonds, and structured instruments. Additionally, a segment of the market is opting to convert holdings into foreign currency as a hedging strategy against potential cedi depreciation.
Trend in 91-day and 182-day Treasury bill rates
In April, yields across the short-term curve displayed signs of stabilization, indicating a brief pause in the downward rate trajectory. The 91-day Treasury bill remained range-bound around the 15% mark, ending the month at 15.32%. Similarly, the 182-day and 364-day tenors settled at 16.04% and 18.37%, respectively, reflecting a market recalibration following earlier aggressive yield compression.
However, the first auction in May introduced renewed volatility, with rates experiencing a notable downward adjustment.
This led to a significant undersubscription of 16.29%; the weakest auction performance since the end of March, effectively reversing the 18.24% oversubscription recorded during the final week of April. The abrupt shift highlights growing investor caution amid compressing yields and mixed macroeconomic indicators.
Over the past four weeks, total bids for government Treasury instruments amounted to GHS 25.87 billion. Of this, GHS 22.8 billion was accepted, resulting in a high bid acceptance rate of 88.13%. This elevated acceptance rate underscores the government’s persistent financing needs despite wavering investor participation.
Demand remained heavily skewed toward short-duration instruments. The 91-day bill attracted 74.08% of total bids, while the 182-day and 364-day instruments garnered only 16.41% and 9.51%, respectively. This conservative investor stance was also mirrored in the allocation of accepted amounts: 91-day bills accounted for 76.97% of total accepted bids, compared to 15.35% and 7.68% for the 182-day and 364-day maturities, respectively.
T-bill Rates and the USDGHS
The Ghana Cedi experienced notable depreciation in the early part of 2025, weakening by 5.04% as at February 10th. However, the local currency has since shown relative stability, with only a marginal cumulative depreciation of 0.18% recorded over the subsequent three months, from February 10 to April 14.
This stability can be largely attributed to several external and domestic factors. On the global front, the U.S. dollar has softened slightly due to heightened trade uncertainties and the re-emergence of tariff tensions, particularly surrounding U.S.–China trade relations. This has eased some of the pressure on emerging market currencies like the Ghana Cedi.
Domestically, the BoG’s proactive measures such as regular forward forex auctions and a modest improvement in Gross International Reserves (GIR – Import Cover has improved from 4.0 months in Dec 24 to 4.2 months in Feb 25), have played a crucial role in anchoring exchange rate expectations and curbing speculative activity in the forex market. These interventions have provided a buffer against volatility, even in the face of strong seasonal demand for foreign exchange.
There have been growing market concerns suggesting that some investors are converting their Cedi cash into U.S. dollars in anticipation of further depreciation. While this sentiment may exist, there is currently insufficient empirical evidence to confirm widespread currency flight. That said, if inflationary pressures persist or global economic shocks intensify, these speculative actions could accelerate and threaten the Cedi’s stability in the months ahead.
Alternative #1: The Ghana Stock Exchange
GSE-CI is the best performing index across major African Exchanges
The Ghana Stock Exchange (GSE) ranked as the top-performing equity market among African exchanges in April 2025, delivering a 7.59% return in USD terms.
Ecobank Transnational Inc. (ETI) leads the market with a 184% YTD gain, followed by Clydestone at 167% and SIC Insurance at 159%. TotalEnergies and CalBank also posted strong performances, rising 87% and 86%, respectively, though CalBank’s return is down from 114.29% at March-end.
FanMilk recorded a modest 2.7% gain, increasing from GHS3.70 to GHS3.80; its first uptick in a while.
Despite these gains, market liquidity remains limited, with trading activity concentrated in a few equities. This ongoing challenge continues to hinder broader investor participation.
Alternative #2: Listed Corporate Bonds
Tapping into the Potential of Listed Corporate Bonds
Historically, Ghana’s debt markets were dominated by government bills and bonds until 2014, when corporate entities began actively participating. This shift marked a significant milestone, culminating in the establishment of the Ghana Fixed Income Market (GFIM); a dedicated exchange for trading debt securities, in 2015.
An increasing number of local corporations are now leveraging the bond market as a viable alternative to traditional bank loans for capital raising. The most recent corporate listing is Kasapreko’s GHS 600 million Note, which achieved a 100% subscription rate in Tranche 1,2 and 3 raising a total of GHS 351.1 million. The number of corporate bond issuers increased to 13, with GHS 24.1 billion raised at the end of 2024, reflecting heightened corporate participation and investor confidence.
Although corporate bonds carry relatively higher risk compared to treasury securities, they currently offer more attractive returns. Typically, these returns consist of the prevailing treasury bill rate plus a risk premium, often ranging between 3% and 5%, depending on the issuer’s creditworthiness. Enhanced regulatory oversight by the Ghana Fixed Income Market (GFIM) and the growing presence of credit rating agencies have contributed to increased transparency and investor confidence, making corporate bonds a compelling alternative to treasury bills.
Alternative #3: Real Estate Investment Trusts (REITS)
A Liquid Gateway to Real Estate Returns
Ghana’s real estate industry stands out as one of the most vibrant in the West African sub-region. This strong performance is driven by factors such as rapid urbanization, market dynamism, macroeconomic stability, growth in the financial sector, and enhanced regulatory and legal frameworks – all contributing to increasing demand across various property types.
REITs (Real Estate Investment Trusts) are companies that pool investors’ funds to invest in real estate. They own, operate, or finance income-generating properties, providing investors with an opportunity to participate in real estate markets without directly owning properties. REITs generate income primarily through rental income and are required to distribute at least 80% of their taxable income as dividends. In Ghana, the REIT market is still in its early stages, with only two licensed REITs currently available for investment: Republic REIT and Sentinel REIT.
As most real estate properties are priced in dollars, returns from REITs often serve as an effective hedge against currency depreciation. When managed properly, REITs can generate strong returns for investors, not only by capitalizing on rental income but also by benefiting from currency fluctuations. This makes REITs an attractive investment option,
Alternative #4: Gold
The BoG Gold Coins; An avenue for wealth preservation
Gold is widely regarded as a reliable store of value due to its scarcity, durability, and resistance to economic and geopolitical instability. Unlike consumable commodities, gold maintains its worth over time, with a slow supply growth that supports long-term value retention. Its non-perishable nature makes it ideal for wealth preservation, especially during periods of inflation, currency devaluation, or market volatility.
The Bank of Ghana Gold Coin presents a compelling investment opportunity, especially in times of economic uncertainty and currency depreciation. Backed by the central bank, the coin provides a secure and accessible means for both seasoned and first-time investors to diversify their portfolios with a tangible, low-risk asset.
The coins are available for purchase at leading commercial banks such as ABSA and can be acquired in fractional sizes, allowing investors to own physical gold in more affordable portions. They are offered in denominations of 1 oz, 0.5 oz, and 0.25 oz, providing flexibility for different investment levels.
Since its introduction in November, 2024, the coins have returned an average of 17.7% in cedi terms to investors
The Ghana Gold Coin, since its inception is available in three denominations: 0.25 oz, 0.50 oz, and 1.00 oz.
Alternative #5: Other Assets
Mutual funds investing in dollarized assets
Fixed deposits from banks
By Nelson Cudjoe Kuagbedzi, Head of Finance, Merban Capital
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
