By Toma Imirhe
Early signals are emerging of a gradual but notable rebalancing of investment portfolios within Ghana’s fixed income market, as some institutional and high-net-worth investors begin to shift funds away from short-term Treasury bills into a mix of central bank Open Market Operations (OMO) instruments, bank deposits, and equities.
The move, while still tentative, reflects changing yield dynamics and liquidity preferences following the Bank of Ghana’s monetary easing cycle and the sharp decline in short-term interest rates.
Recent auction data shows a sustained drop in Treasury bill yields across the curve. The 91-day bill rate had fallen to about 4.91%, while the 182-day and 364-day instruments were offering roughly 6.78% and 9.98% respectively as of mid-April 2026.
This marks a significant decline from levels above 10% earlier in the year and over 11% at the end of 2025, reflecting both easing inflation and the impact of the policy rate cuts.
Despite these lower yields, Treasury bills continued to attract strong nominal demand, although recent auctions recorded under-subscription rates forcing a slight uptake in the interest rates they offer.
“Demand is still strong, but it is becoming more selective,” said a fixed income strategist at a leading Accra-based asset management firm. “Investors are increasingly unwilling to lock in funds at current short-term yields when alternative instruments offer either better returns or comparable returns with more flexibility.”
One leg of the emerging rebalancing is towards the Bank of Ghana’s Open Market Operations (OMO) instruments and longer-dated government bonds.
OMO bills used by the central bank to manage liquidity have become more attractive to banks and institutional investors seeking short-term placements with competitive rates and -with 14 days tenor – lower duration risk.
At the same time, some investors are extending duration into medium- to long-term bonds on the secondary market, to lock in yields ahead of a potential further decline in interest rates. With government having resumed medium term bond issuances with a seven year bond recently, this window of opportunity is widening.
“With the yield curve expected to compress further, there is a clear incentive to move into longer tenors now,” notes an Accra-based bond market analyst. “The opportunity cost of staying in 91-day bills is rising.”
A second stream of reallocation is flowing into bank deposits and near-cash instruments.
Commercial banks, adjusting to the lower monetary policy rate, have begun tweaking deposit offerings to retain liquidity, particularly from corporate clients. While deposit rates remain below historical T-bill yields, they are increasingly competitive on a risk-adjusted basis.
For conservative investors, especially corporates managing working capital, the appeal lies in liquidity and capital preservation.
“Some clients prefer to keep funds in high-quality bank deposits or money market funds where they can access liquidity quickly,” said a treasury manager at a tier-one Ghanaian bank. “The marginal yield superiority of T-bills is no longer enough to justify being locked into them.”
Perhaps the most notable, albeit still limited, shift is towards equities.
The Ghana Stock Exchange has posted strong returns in recent months, driven by banking sector recovery following the Domestic Debt Exchange Programme and improved macroeconomic stability.
“Equities are beginning to look attractive again, particularly bank stocks which are showing strong earnings rebounds,” says an equity analyst at a local brokerage. “We are seeing some rotation from fixed income into equities, but it is still modest.”
Market participants say the shift into equities is being constrained by several factors.
First, risk appetite remains cautious after recent macroeconomic shocks. Second, liquidity on the stock market is relatively thin compared to the fixed income market. Third, many institutional investors face mandate restrictions that limit equity exposure.
“There is interest, but not a wholesale shift,” the analyst adds. “Investors are dipping their toes in the water, rather than actually diving in.
Taken together, these trends point to an emerging three-way portfolio rebalancing One is reduced incremental allocations to short-term T-bills due to falling yields; another is increased placements in OMO instruments and longer-dated bonds; and the third is diversification into bank deposits and a gradual tilt towards equities
This is not yet a wholesale exit from government securities, but rather a reallocation within and beyond the fixed income space.
Looking ahead, analysts believe equities could attract a larger share of investment flows though if current conditions persist.
Key triggers would include continued macroeconomic stability, sustained earnings growth by listed companies especially banks and further declines in fixed income yields.
“If T-bill rates remain below 5% at the short end, the relative attractiveness of equities will improve significantly,” asserts the asset manager. “But it will take time for confidence to fully return.”
For now, the rebalancing remains gradual and segmented, driven by differing risk appetites and liquidity needs. But the direction is becoming clearer: Ghana’s investment landscape is slowly shifting from a T-bill-dominated market to a more diversified allocation across asset classes.
