Tag: Bond Market

  • Mahama confident in 2026 expansion as IMF cautions on bond market return

    Mahama confident in 2026 expansion as IMF cautions on bond market return

    As the International Monetary Fund (IMF) urges caution regarding Ghana’s return to the international bond market, President John Dramani Mahama is exuding confidence in the nation’s economic trajectory, outlining an ambitious roadmap for accelerated growth and expansion throughout 2026.

    The divergence in tone highlights a delicate balance between leveraging recent economic stability, bolstered by strong domestic investor sentiment and a rallying cedi, and heeding international advice to manage future fiscal risks carefully.

    The IMF’s Measured Warning

    Ghana’s government has signaled its intention to resume the issuance of treasury bonds in early 2026, a strategic move aimed at lengthening the average maturity of its debt and easing rollover risks following the 2023 domestic debt restructuring.

    However, the IMF, in recent advice to the government, has counselled a gradual and cautious approach. The international body points to a narrowing spread between bond yields and the central bank’s monetary policy rate. Furthermore, while the secondary bond market advanced strongly last week, the primary market for government paper has seen a receded appetite in recent auctions, a factor the IMF believes warrants prudence.

    Since the debt restructuring, treasury bills have been the primary source of budget financing. The IMF’s advice underscores a need to ensure sustainable market appetite before fully committing to larger bond issuances.

    Investor Confidence Remains High in T-Bills

    Despite the caution surrounding the long-term bond market, investor sentiment in short-term instruments remains robust. Data from the Bank of Ghana for the week of December 29, 2025, shows that Treasury bills were oversubscribed by 18.48%.

    Investors submitted total bids of GH¢3.91 billion, exceeding the Treasury’s target of GH¢3.30 billion. This strong demand, particularly for the 91-day bill, reflects a rebound in bank participation and suggests a high degree of confidence in the government’s short-term fiscal management. Interest rates edged up slightly across all maturities, indicating sustained market appetite.

    President Mahama Charts a Confident 2026 Roadmap

    In his New Year Message to the Nation on January 1, 2026, President Mahama focused squarely on expansion and delivery, signaling that the government is confident enough in its 2025 gains to accelerate reforms.

    The President outlined a broad agenda aimed at transforming key sectors:

    Social Services: Operationalizing Universal Health Coverage through the Free Primary Health Care Programme and continuing the digitalisation of schools.

    Agriculture and Energy: Transforming farming into a commercially viable sector and working towards a 30% share of renewable energy in the national mix to reduce costs.

    Governance: Intensifying the fight against corruption with “no sacred cows” and implementing recommendations of the Constitutional Review Committee.

    “The gains made in 2025 provide a foundation for building the Ghana that citizens desire,” the President stated, projecting a sense of certainty and control over the nation’s economic future that appears to contrast with the IMF’s more measured risk assessment.

    As Ghana navigates its recovery, the government faces the challenge of balancing its ambitious growth agenda and confidence in its own policies with the cautious, risk-averse guidance of its international partners.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • ‘Reset revenue mobilisation strategy’ – IFS advises

    ‘Reset revenue mobilisation strategy’ – IFS advises

    The Institute for Fiscal Studies (IFS) has called for a reset in Ghana’s revenue mobilisation strategy, particularly within the extractive sector.

    The Institute is alarmed with the inadequate revenue generation, undermining the government’s development programmes.

    A senior research fellow at IFS, in a recent document, recommended that Ghana move away from the current concession regime and instead adopt Production Sharing Agreements (PSAs), arguing that, PSA have proven to generate higher revenues and foreign exchange inflows for resource-rich countries.

    “Production sharing agreements have been shown to result in more substantial revenue generation and greater foreign exchange inflows, which can strengthen the economy on a more sustainable basis,” Leslie Dwight Mensah said.

    As other energy experts have argued, Mr Mensah agreed that active state participation in the extractive industry would allow Ghana to exercise greater control over its natural resources, reducing reliance on third-party institutions to manage and market the country’s mineral produce. But he criticised the government’s Gold for Development programme, emphasizing that it fails to address Ghana’s fiscal revenue challenges.

    According to him, the programme treats gold purely as a business commodity without ensuring majority state ownership or revenue capture for the country.

    Key Recommendations

    Among other things, the IFS research fellow outlined three major steps the government should take: Transition from concession regimes to PSAs in the extractive sector to increase state revenues and foreign exchange inflows; Refrain from rushing back to international borrowing as a short-term fix to fiscal challenges, as this risks deepening debt vulnerabilities and triggering another crisis; and Fully disclose and account for fiscal support provided to the financial sector in national accounts to present a complete picture of Ghana’s fiscal position.

    Mr. Mensah stressed that implementing these measures would not only strengthen Ghana’s revenue base but also place the economy on a more sustainable growth path.

    By Adnan Adams Mohammed

  • Mahama’s ‘BIG PUSH’ to receive boost …as Ghana readies to re-enter bond market amidst Fitch’s upgrades 

    President John Mahama in a discussion with Dr Cassiel Ato Forson

     

     

    Adnan Adams Mohammed

     

    All things being equal, President John Mahama’s ‘BIG PUSH’ initiative will soon receive a boost as the government prepares to re-enter the international bond market amidst soaring investor confidence.

     

    This comes as Fitch Ratings has upgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘Restricted Default’ to ‘B-’ with a Stable Outlook, signalling a major vote of confidence in the country’s ongoing economic recovery under the stewardship of Finance Minister Dr. Cassiel Ato Forson.

     

    The upgrade reflects significant progress in Ghana’s fiscal and debt management, following the successful restructuring of $13.1 billion in Eurobond debt and the near-completion of outstanding external debt negotiations. Fitch notes that Ghana has normalised relations with most commercial creditors and expects full restructuring to be finalised by the end of 2025. This will usher Ghana back onto the international bond market to access funds for its developmental agenda.

     

    The NDC in its election 2024 manifesto indicated it will roll out the ‘Big Push’ for national infrastructure development to continue its legacy of massive infrastructure development to boost growth and create sustainable jobs.

     

    The “Big Push” is a policy aimed at driving national infrastructure development in Ghana, focusing on completing abandoned projects, revamping the Ghana Infrastructure Investment Fund, and expanding water supply systems.

    This initiative includes a US$10 billion accelerated plan and specific projects like the Sogakope Trans-Boundary Water System and the Pwalugu multi-purpose dam.

     

    According to the Fitch report, one of the standout achievements is the sharp decline in inflation, which has dropped from 23% in 2024 to 18.4% in May 2025—the lowest rate in over three years. Inflation is expected to continue falling, averaging 15% in 2025 and 10% in 2026, supported by tight monetary policy, fiscal discipline, and improved exchange rate stability.

     

    The Ghana cedi has appreciated significantly in recent months, reversing previous trends and helping to ease price pressures on imported goods and fuel. Fitch credits the cedi’s strong performance to renewed confidence in Ghana’s macroeconomic fundamentals and proactive interventions by the Ministry of Finance and the Bank of Ghana.

     

    Finance Minister Dr. Cassiel Ato Forson has led a bold economic reset since assuming office, with a clear strategy focused on fiscal consolidation, debt sustainability, and restoring market confidence. Under his leadership:

     

    Ghana’s public debt-to-GDP ratio is projected to decline to 60% in 2025, down from 93% in 2022; Gross international reserves are now at $6.8 billion, with more growth expected in 2025 and 2026; The fiscal deficit is narrowing, with a projected primary surplus of 0.5% of GDP in 2025.

    Interest payments now consume only 25% of revenue, down from 48% in 2021; Real GDP growth remains solid, at 5.7% in 2024 and projected at 4% in 2025.

     

    In response to the credit upgrade, senior officials at the Ministry of Finance attributed Dr. Forson’s firm policy direction and stakeholder engagement for restoring Ghana’s credibility in global markets.

     

    “This milestone reflects the Finance Minister’s bold leadership in navigating Ghana out of default and laying the foundation for sustainable growth,” one official stated. “Lower inflation, a stronger cedi, and renewed investor interest are all signs that the economy is stabilising.”

     

    The Fitch upgrade is more than a technical rating change—it’s a significant endorsement that will boost Ghana’s appeal to foreign investors, support the reopening of domestic capital markets, increase the country’s access to cheaper credit and ease pressure on public finances.

     

    Dr. Forson, speaking earlier this month, reaffirmed the government’s commitment to staying the course:

     

    “We are building an economy that works for everyone. This upgrade is a signal that Ghana is back on track, and we will not relent in protecting the gains we’ve made.”

     

    Ghana’s path from default in 2022 to a ‘B-’ stable outlook in mid-2025 represents one of the strongest sovereign credit turnarounds in sub-Saharan Africa in recent years. But as Dr. Forson and the Ministry of Finance continue to emphasise, this is not the finish line. With inflation declining, the exchange rate stabilising, and debt falling, the Fitch upgrade is not only a win for the government but a hopeful sign for all Ghanaians looking forward to a more stable and prosperous future.