In brief
- In our last edition, we argued that Ghana’s rates market was moving from a liquidity story to a credibility story. The first eight months of 2026 proved that. Inflation is down to 5.0 percent, the policy rate to 14.0 percent, debt holds at about 46 percent of GDP, and the IMF has revised Ghana’s debt distress risk from high to moderate. Yet the curve repriced upward from April, a sign the market is charging for stresses beneath the recovery.
- Two stresses stand out. The first is that the huge additional issuance of some existing Treasury bonds have pushed yields up by roughly 150 to 200 bps. The second is the currency. The cedi is down about 9 percent this year. Gold-related FX inflows remain the key stabilizing factor, but with gold trading roughly 17 percent below its January peak and much of market demand met through GoldBod flows, reserve accumulation has slowed. Consequently, reserves fell from USD 14.2 billion in March to USD 12.0 billion in September, limiting the Bank of Ghana’s capacity to absorb demand pressures.
- Liquidity is shaping the market more than ever. Coupons and maturities return cash to investors and compresses Treasury bond, and bill yields in those periods. The 18 August coupon paid GHS 10.8 billion and reaffirmed the pattern. We expect the same in February and August 2027, when two to four times that liquidity is paid.
- The cedi weakness we expect has a hedge that pays. With the Eurobond price rally fading, income now carries the return, and the 2029s offer attractive dollar income for cedi portfolios at a yield near 6.0 percent. The key risk to watch is the US Federal Reserve, where persistent inflation pushes the authorities further onto a hawkish interest rate path.
- Our strategy is to buy the belly of the curve, the 2029 to 2031 maturities, while keeping an eye on fiscal discipline indicators. The payoff for extending duration today is not justified in either local bonds or Ghana’s Eurobonds. We recommend prioritising liquidity and defensiveness to capture temporary dislocations in price across the curve while the path towards a sustained macro recovery becomes clearer in the next 6 to 12 months.
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