IN BRIEF

• GHANA
  Fixed Income: Demand for Ghanaian T-bills fell for the third straight month in May 2025 as investors shifted to higher-yielding assets. Banks increased holdings of BOG OMO bills attractively price at 28% yield, while institutional investors largely favoured equities and alternative assets. However, yields dropped sharply with the 364-day bill trimming 237bps to 16.0% as the Treasury continued to reject bids with yield quotes above its acceptable threshold. The bond market stayed bullish, with the IC Government Bond Index up 2.4% month-on-month and a YTD gain of 24.0% to 88.9pts, driven by strong trading in 2027 and 2028 bonds. 

  
  Currency

  The Ghanaian Cedi was the best-performing African currency in May 2025, appreciating 38.0% month-on-month against the US Dollar (YTD: +43.4%), closing at 10.25/USD. The strong rally was supported by ample FX liquidity from the Bank of Ghana’s USD 932.2mn FX sales in May 2025 (USD 2.7bn YTD) and subdued corporate demand. Although our fair value model suggests 14.87/USD, accumulated undervaluation from 2022 – 2024 implies an adjusted fair value at 12.2/USD. Additionally, the stronger-than-expected current account surplus and the authorities’ new “GoldBod model” underpins a bullish outlook with a near-term floor around 10.0/USD.

 

• KENYA
  Fixed Income: Demand for Kenyan T-bills fell 15.6% in May 2025 to KES 148.4bn, driven by a 46.2% drop in bids for the 91-day tenor as investors favored longer tenors, despite slightly lower yields. The FY25/26 draft budget targets a narrower deficit of 4.5% of GDP (vs. 5.1% in FY24/25), with financing expected from external (1.5% of GDP) and domestic (3.0%) sources. However, weak revenue prospects amidst tight external conditions point to greater reliance on domestic borrowing, supported by the current decline in local yields. 

  Currency
  The Kenyan shilling remained stable at 129.2/USD in May 2025, backed by strong export and remittance inflows. FX reserves rose 7.7% to USD 10.5bn, covering 4.7 months of imports. We expect the shilling to stay resilient in the near term, supported by strong reserves and Central Bank interventions.

 

 

• NIGERIA
  Fixed Income: Nigeria’s T-bill market stayed subdued in May 2025 with only two auctions and a 15.3% drop in bids to NGN 2.3trn, though the Treasury accepted NGN 1.2trn, above target and prior levels. Yields held steady, and we expect the CBN’s tight policy stance amidst volatile inflation to maintain yield stability as authorities aim to restore positive real returns. 

  
  Currency

  The Nigerian Naira stabilized in May 2025, aided by slight recovery in oil prices and a 1.6% uptick in reserves to USD 37.8bn. The CBN introduced a Non-Resident Bank Verification Number to boost remittances, targeting USD 1.0bn monthly, though we think a jump from USD 4.7bn in 2024 to USD 12.0bn in 2025 is unlikely.