News Guide Africa

Tag: Ministry of Finance

  • Investor fatigue deepens as gov’t records 20% ditch in latest T-Bill auction

    Investor fatigue deepens as gov’t records 20% ditch in latest T-Bill auction

    By Adnan Adams Mohammed

     

    In a worrying development for national fiscal management, the government’s latest Treasury bill auction recorded a massive 20.2% undersubscription, resulting in a staggering GH¢1.07 billion shortfall.

    The failure to hit the auction target comes despite central bank and treasury officials pushing interest rates to fresh highs in a desperate bid to lure hesitant investors.

    Market analysts warn that the rising yields, paired with falling subscription volumes, signal deepening investor fatigue and heightened anxieties regarding the state’s domestic debt trajectory and inflationary pressures.

    Inside the Numbers: The Billion-Cedi Shortfall

    The Ministry of Finance and the Bank of Ghana set an ambitious target of GH¢5.32 billion across the 91-day, 182-day, and 364-day tenors to meet immediate debt rollover requirements and short-term budgetary needs. However, the auction results revealed that total bids submitted by commercial banks and the public amounted to just GH¢4.25 billion.

    The government accepted all bids tendered, leaving a gaping GH¢1.07 billion deficit in its weekly financing goals.

    To attract buyers, the state allowed yields to jump significantly. The 91-day bill average interest rate crept up further into the upper 20s, while the 182-day and 364-day instruments followed a similar upward trajectory.

    “The math is becoming incredibly expensive for the state,” noted a fixed-income strategist at an Accra-based investment firm. “The government is offering higher yields, but the market simply isn’t biting like it used to. A 20% undersubscription tells us that institutional investors, particularly commercial banks, are aggressively hoarding liquidity or diversifying out of government paper due to perceived structural risks.”

    Rising Interest Rates Feed Financial Sector Anxiety

    The persistent rise in T-bill rates is sending ripples through the broader financial sector, threatening to crowd out private-sector credit and force commercial lending rates upwards.

    Speaking to journalists on the implications of the current yield trajectory, an independent financial analyst expressed concern that the high-interest rate environment is creating a structural trap for local businesses.

    “When risk-free short-term government paper is pushing toward 30%, commercial banks have zero incentive to lend to small and medium enterprises,” the analyst explained. “This creates a double-edged sword. On one hand, the government is paying a premium to borrow, escalating our national debt servicing costs. On the other hand, the real economy is being starved of affordable credit, which will inevitably stall economic growth.”

     

    Concurrently, fund managers are pointing out that while the higher yields look attractive on paper, they fail to offset the underlying fears of currency depreciation and sticky inflation. Investors are demanding higher premiums because they remain highly cautious about locking up capital, even for 91 days.

    Fiscal Pressure on the Horizon

    The GH¢1.07 billion auction shortfall places immediate fiscal strain on the Treasury. With the domestic capital market serving as the government’s primary source of deficit financing following its exclusion from international capital markets, continuous undersubscriptions could force the state into difficult choices.

    “If this trend of undersubscription continues over the coming weeks, the government will be forced to either drastically cut back on critical infrastructure spending or rely on central bank overdraft facilities, which would only trigger further inflationary pressures,” a banking executive warned under condition of anonymity.

    As the Ministry of Finance prepares for its next weekly auction, pressure is mounting on fiscal authorities to present a clearer roadmap for expenditure rationalization. Market participants emphasize that raising interest rates alone will no longer suffice; the state must restore broader investor confidence in its long-term fiscal discipline to get the domestic market back on track.

     

  • Ghana targets strict energy reforms to curb debt, projects oil production growth

    Ghana targets strict energy reforms to curb debt, projects oil production growth

    By Adnan Adams Mohammed

    Ghana’s energy sector is undergoing a major structural turnaround, aiming to address persistent debt while reversing years of declining oil production.

    Through a combination of aggressive state-owned enterprise (SOE) overhauls, strategic investor interventions, and targeted consumer cushions, the government is moving to secure the country’s long-term energy independent future.

    The comprehensive strategy addresses both upstream production deficits and downstream financial leakages to restore full investor confidence in the nation’s energy markets.

    Cracking Down on Energy Sector Debt

    At the core of the new policy drive is an unyielding approach to the financial imbalances that have historically weighed down Ghana’s power sector. Finance Minister Dr. Cassiel Ato Forson announced that the government will enforce strict operational and financial disciplines across all energy-related State-Owned Enterprises, including the Electricity Company of Ghana (ECG) and the Ghana Grid Company (GRIDCo), to permanently halt the accumulation of energy sector debt.

    The central government will no longer offer open-ended financial lifelines to underperforming utility companies.

    “We are introducing strict performance-based contracts and rigorous oversight mechanisms for all energy sector SOEs,” Dr. Forson stated. “The days of the central government absorbing inefficiencies and uncollected revenues are over. Every state agency in the energy value chain must operate with corporate commercial discipline, optimize its revenue collection, and account for every megawatt distributed.”

    The Minister emphasized that plugging these financial leakages is critical to stabilizing the broader macroeconomic environment. “Curbing the rising energy sector debt is not just about keeping the lights on; it is about protecting our national treasury and signaling to international markets that Ghana is serious about fiscal sustainability,” Forson added.

    Reversing the Six-Year Upstream Decline

    The financial reforms arrive alongside highly anticipated positive news from Ghana’s upstream petroleum sector. After nearly six consecutive years of diminishing crude oil output from major fields like Jubilee, TEN, and Sankofa, energy officials confirmed that production curves are officially projected to rise.

    This turnaround follows targeted regulatory adjustments and negotiated asset expansions designed to restore weakened investor confidence.

    “We have successfully reversed the power deficits, arrested the decline in oil production, and restored investor confidence that had visibly softened over the last few years,” an absolute representative from the Ministry of Energy noted during a technical briefing.

    The ministry attributes this production shift to aggressive well-drilling campaigns and altered contractual terms that made drilling in Ghana’s deepwater blocks commercially viable once more. “For the first time in almost six years, Ghanaians can expect a verifiable increase in domestic crude oil production. This means expanded fiscal space, heightened employment opportunities in the oil services sector, and a stronger position for our national oil company, GNPC,” the official stated.

    Extending Consumer Cushions Against Global Volatility

    While the government focuses on long-term structural fixes, it is also taking immediate steps to shield citizens from volatile international energy prices. Due to ongoing geopolitical tensions and fluctuating global crude benchmarks, the administration announced a formal extension of its targeted fuel price intervention.

    The intervention utilizes strategic adjustments in petroleum transport levies and domestic refinery partnerships to keep prices manageable at the pumps.

    “We recognize that the global energy market remains highly unpredictable, and our citizens cannot bear the brunt of that volatility alone,” the Ministry of Finance announced in an official policy statement. “Government has therefore taken the decision to extend the fuel price intervention mechanism to cushion consumers against rising costs.”

    Administration officials clarified that these interventions are structured to avoid creating new state deficits, relying instead on optimized revenue flows from the newly surging upstream oil sector to balance the consumer cushions. By combining immediate relief at the pumps with structural discipline across utility companies and a revival in offshore drilling, Ghana is positioning its energy sector to act as a primary catalyst for economic expansion rather than a financial bottleneck.

     

  • The 45% Tomato crisis and the indigenous brand fighting to secure Ghana’s value chain

    The 45% Tomato crisis and the indigenous brand fighting to secure Ghana’s value chain

    By Adnan Adams Mohammed

    Walk through any major food market in Accra, Kumasi, or Tamale during the peak harvesting season, and the visual is as familiar as it is heartbreaking: mountains of crushed, overripe tomatoes left to rot in wooden crates or dumped by the roadside.

    Despite being one of the largest consumers of tomatoes per capita in West Africa, Ghana finds itself trapped in an agricultural paradox.

    The nation wastes up to 45 percent of its domestic tomato production annually to post-harvest losses, yet continues to import hundreds of millions of dollars worth of processed tomato paste from Europe and Asia every year.

    Now, a homegrown Ghanaian agribusiness brand is aiming to disrupt this cycle, turning a massive systemic waste into a sustainable, localized economic asset.

    The Anatomy of a Food Security Crisis

    The structural inefficiencies plaguing Ghana’s tomato sector run deep. Smallholder farmers, primarily in the Bono East, Upper East, and Ashanti regions, rely heavily on seasonal rainfall and face a total lack of specialized cold storage transport. When the harvest hits all at once, the local market becomes aggressively flooded.

    Because fresh tomatoes have a highly volatile shelf life, farmers are routinely forced to accept exploitative, rock-bottom prices from traveling middlemen—popularly known as the “Tomato Queens”—or watch their entire livelihood spoil in the fields.

    “The fact that we are losing nearly half of what our hardworking farmers sweat to cultivate is not just a financial tragedy; it is a profound national food security failure,” noted Akosua Kyerewaa, an agricultural economist specializing in supply chain logistics.

    She explained that while successive governments have promised state-of-the-art factories to resolve the crisis, large-scale processing plants often collapse because they are poorly integrated with the smallholders or fail to compete with heavily subsidized foreign imports. “We don’t just need giant factories that sit idle for half the year. We need localized, agile processing solutions that can immediately absorb gluts at the farm gate,” Kyerewaa added.

    A Homegrown Answer to Post-Harvest Loss

    Stepping directly into this gap is a dynamic Ghanaian food processing brand determined to prove that the country’s tomato crisis can be solved using local innovation. By establishing a direct-purchasing network with smallholder cooperatives, the company bypasses predatory distribution chains and ensures that surplus tomatoes are salvaged long before they begin to deteriorate.

    Instead of trying to replicate the highly processed, preservative-laden pastes imported from overseas, the brand focuses on premium, naturally preserved tomato purees, diced blends, and indigenous sauces tailored specifically to the West African palate.

    “We looked at the statistics and realized that the answer to Ghana’s tomato dependency wasn’t across the ocean it was rotting in our own backyards,” stated the founder of the agribusiness initiative during a recent manufacturing showcase.

    By utilizing decentralized processing hubs closer to the farming centers, the company significantly minimizes the long, bumpy transit times in unventilated wooden crates that typically damage fresh produce. “Our mission is simple: we want to ensure that no single tomato grown by a Ghanaian farmer goes to waste. By processing these tomatoes locally, we are retaining wealth within our rural communities, creating manufacturing jobs, and offering consumers a fresher, healthier, and entirely indigenous alternative,” the founder emphasized.

    Rewriting the Market Narrative

    The push for local tomato processing arrives at a critical moment for Ghana’s macroeconomic recovery. With the Ministry of Finance strictly policing foreign exchange flight, reducing the national import bill for basic food items has become a matter of sovereign urgency.

    However, industry experts warn that processing the tomatoes is only half the battle; changing consumer behavior remains a significant hurdle. For decades, Ghanaian households and commercial caterers have been conditioned to prefer foreign-branded tomato pastes, which often contain added starch and artificial coloring to alter texture and appearance.

    “To truly win this battle, the Ghanaian consumer must actively choose homegrown quality over imported convenience,” a retail market analyst observed.

    Local processors are countering this by launching aggressive educational campaigns to show that natural, locally processed tomatoes preserve the authentic, rich flavor profile required for traditional dishes like Jollof rice and light soup.

    By fixing the broken links between farm gates and consumer kitchens, this homegrown movement is proving that with the right application of local capital and logistical ingenuity, Ghana can finally close its 45 percent waste gap transforming a seasonal crisis into a sustainable blueprint for continental food sovereignty.

     

  • Finance Minister lays 4 critical fiscal and energy reports before Parliament to anchor accountability

    Finance Minister lays 4 critical fiscal and energy reports before Parliament to anchor accountability

    In a major statutory move toward total fiscal openness and institutional transparency, the Minister for Finance, Dr. Cassiel Ato Forson, has formally presented four critical accountability documents to Parliament.

    The comprehensive legislative submissions, which span energy levy management, state petroleum revenue distributions, and broader macro-fiscal performance records, outline how billions of cedis in public funds were collected, ring-fenced, and utilized over the past fiscal cycle.

    The presentation satisfies crucial provisions of the Public Financial Management Act (PFMA) and the Petroleum Revenue Management Act (PRMA). State actors point to the delivery as definitive proof that the government is anchoring its ongoing economic reset in raw data and absolute compliance.

    Auditing the energy lifelines: ESLA under scrutiny

    Among the core documents tabled before the house, the 2025 Energy Sector Levies Act (ESLA) Report captured the immediate attention of lawmakers. The detailed text outlines the exact breakdown of revenues collected through downstream petroleum taxes and shows how those funds were distributed to amortize legacy energy sector debts, fund legacy generation shortfalls, and support primary power sector entities.

    Addressing parliamentarians during the presentation, Dr. Ato Forson emphasized that keeping the public and lawmakers fully informed on energy fund flows is non-negotiable for sustaining private investor confidence in Ghana’s utility grid.

    “We are placing these four key fiscal and energy reports before this august house because the era of managing public funds in opacity is permanently over,” Dr. Ato Forson declared from the chamber floor. “The 2025 ESLA report, in particular, provides a transparent window into how petroleum tax revenues were used, especially regarding our energy sector debt recovery strategies. Every cedi collected at the pumps must be accounted for, tracked, and channeled explicitly toward clearing state liabilities and stabilizing our national power infrastructure.”

    Tracking oil wealth and fiscal guardrails

    Beyond the energy levies, the Ministry of Finance concurrently presented the Annual Report on the Petroleum Funds, giving legislators a detailed look into the state’s oil windfalls. The report tracks allocations made into the Ghana Stabilization Fund (GSF) and the Ghana Heritage Fund (GHF), demonstrating how the sovereign wealth vaults are being guarded to shield the nation against future global commodity price shocks.

    The Minister explained that rigorous compliance with the PRMA ensures that current natural resource windfalls directly build capital assets rather than funding recurrent administrative expenses.

    “Our natural resources belong to the people of Ghana, both present and future generations,” the Finance Minister stated during his briefing to the house. “By laying these statutory petroleum reports bare before the representatives of the people, we are demonstrating exactly how our oil proceeds are being managed. We have aligned these flows with strict fiscal discipline to ensure that resource wealth directly backs long-term infrastructure, secures our sovereign buffers, and minimizes any need for future external borrowing.”

    Lawmakers and civil society demand rigid oversight

    The formal presentation of the four reports has triggered intense discussion among parliamentary committees, with members from both sides of the aisle preparing to dive into the technical annexes for deeper committee scrutinization. Minority and majority members alike agreed that the timely submission of these documents gives the legislature the analytical power to perform its constitutional oversight duties effectively.

    A leading member of the Mines and Energy Committee observed that having access to verified, audited expenditure data prevents political speculation and grounds national policy debates in facts.

    “We highly welcome the timely submission of these four crucial energy and fiscal reports by the Finance Ministry,” the committee member remarked outside the chamber. “Parliament cannot exercise its oversight functions blindly. With the ESLA and petroleum funding data now officially before us, we can meticulously verify whether the allocations match the budgetary targets approved by this house. This is a victory for institutional accountability, and we will ensure these documents are thoroughly audited at the committee level.”

    With the reports now officially handed over to the Clerk of Parliament, the various select committees have been mandated to review the text and present finalized assessment briefs to the plenary floor within the coming legislative weeks, solidifying the state’s post-IMF commitment to data-driven fiscal discipline.

     

     

     

     

  • Govt retreats from high Eurobond costs, FX risks …settles for domestic bond issuances for now

    Govt retreats from high Eurobond costs, FX risks …settles for domestic bond issuances for now

    By Toma Imirhe

    The Government of Ghana is deliberately staying away from the international bond market despite the sharp improvement in the country’s macroeconomic indicators, and consequent sovereign credit ratings, with policymakers arguing that elevated United States Treasury yields rather than unusually punitive investor risk premiums would still make any Eurobond issuance too expensive.

    Officials at the Ministry of Finance and the Bank of Ghana say the country has little incentive to rush back onto the Eurobond market after the painful lessons of the 2022 debt crisis, especially at a time when global borrowing costs remain high and the country can increasingly meet its financing needs domestically.

    The cautious stance is also being encouraged by the International Monetary Fund, which has repeatedly stressed the importance of preserving debt sustainability and avoiding a premature return to costly commercial external borrowing at the end of the country’s IMF-supported programme.

    Although Ghana’s sovereign risk perception has improved markedly from the distressed levels recorded immediately after the debt crisis erupted in late 2022, analysts note that benchmark US Treasury yields have climbed significantly over the past two years, keeping overall borrowing costs elevated for frontier market issuers.

    “The spread Ghana would pay today is no longer the main issue,” a fixed income trader at a leading Accra-based investment bank told Economy Times. “The problem is that the underlying US Treasury yield curve itself is still high, so even improved spreads translate into expensive coupons.”

    Currently, US Treasury yields are unusually high by historical standards with the US 10-year Treasury bond yield trading around 4.6%, while the 30-year exceeds 5%.

    Using those US benchmark yields, Ghana would probably face spreads of up to 450 to 700 basis points (4.5% to 7.0%) if it attempted a fresh long term Eurobond issue now.

    That translates into about 9% to 11.5% for a new 10-year Eurobond; although possibly slightly lower for a shorter 5–7 year tenor, but potentially higher if market conditions deteriorated or oil prices surged.

    In practical terms, Ghana could probably re-enter the Eurobond market in 2026 if necessary, but only at close to double-digit borrowing costs.

    That is a huge improvement from the crisis period, but still expensive relative to Ghana’s pre-crisis years.

    In 2019, when Ghana successfully issued US$3 billion in Eurobonds, investor demand exceeded US$21 billion, allowing the country to secure financing at rates ranging between about 7.9% and 10.75% depending on tenor.

    But even this was relatively higher than the terms Ghana got during its earlier years on the Eurobond market. In July 2013, Ghana issued a US$1 billion 10-year Eurobond with a coupon of 7.875%, and the issue was heavily oversubscribed.

    At the time US 10-year Treasury yields were about 2.6% and therefore Ghana’s spread was roughly 525 basis points.

    By contrast, after Ghana lost international market access in 2022 amid debt sustainability concerns, yields on Ghanaian Eurobonds surged to distressed levels well above 30% in secondary markets, effectively shutting the country out of international capital markets.

    Immediately after Ghana suspended payments on much of its external debt in late 2022, the country’s Eurobonds traded at deeply distressed levels, trading at 30–40 cents on the dollar as yields exploded into the 30%–40% range and spreads over US Treasuries exceeded 2,500 basis points and in some cases approached 3,500 basis points. Consequently, with US Treasuries yielding roughly 3.5%–4%, Ghana’s implied borrowing cost was therefore roughly 30%–40%..

    While market conditions have improved substantially since then following debt restructuring and macroeconomic stabilisation, analysts estimate that a new Ghana Eurobond today could still require a coupon in the low-to-mid teens once current US Treasury yields are added to Ghana’s remaining sovereign risk premium.

    Senior government officials have therefore signalled that the country is under no pressure to test international investor appetite in the near term.

    Recent comments from senior Finance Ministry officials indicate government prefers to consolidate gains in fiscal discipline and debt sustainability before considering another Eurobond issuance.

    Instead, authorities are increasingly focusing on rebuilding the domestic bond market, where conditions have improved sharply over the past year following declining inflation, falling treasury bill rates and renewed investor confidence.

    The government has already resumed issuance of longer-dated cedi instruments after an enforced three year hiatus, through a recent seven-year domestic bond issue. Instructively that issuance was very successful, attracting over GHc3 billion in bids at a settlement rate of 12.5%.

    Domestic market conditions are now considerably more favourable than during the height of the crisis. Treasury bill yields have declined steeply from the elevated levels seen in 2023 and 2024, while improving liquidity conditions are gradually extending the tenor appetite of local institutional investors such as pension funds, banks and insurance firms. Indeed, government is now encouraged to let COCOBOD issue bonds on its own balance sheet to the tune of the cedi equivalent of US$1 billion to finance purchases of cocoa beans from local farmers during the next crop season.

    However, the domestic financing strategy still presents important policy choices.

    One option is to rely primarily on local institutional investors and pension funds for medium- to long-term cedi financing. This reduces exchange rate risk because the debt is denominated in local currency, but it can potentially crowd out private sector borrowing if government absorbs too much domestic liquidity.

    Another option is to cautiously reopen portions of the domestic bond market to foreign investors seeking high-yield local currency assets.

    That possibility remains controversial because foreign participation in cedi bonds introduces exchange rate risks and can create vulnerability to sudden capital outflows during periods of market stress.

    Professor Godfred Bokpin of the University of Ghana’s Business School recently warned that allowing extensive offshore participation in domestic bonds could complicate Ghana’s debt sustainability profile and potentially create fresh external sector vulnerabilities.

    The government itself has become more conscious of such risks after the experience of previous foreign participation in domestic debt instruments. Parliamentary discussions earlier this year highlighted the high interest and foreign exchange costs associated with earlier external and offshore-funded borrowing programmes.

    A senior treasury analyst at a local commercial bank said the authorities appear to be pursuing a “middle path.”

    “They want the benefits of a functioning domestic bond market without recreating the exchange rate vulnerabilities that contributed to the last crisis,” the analyst said. “That means gradually extending tenors domestically while being very selective about foreign participation.”

    Officials at the Bank of Ghana have meanwhile continued emphasising macroeconomic stability, reserve accumulation and exchange rate management as key priorities in rebuilding investor confidence.

    For now, market participants say Ghana’s restraint is being positively received by both multilateral institutions and investors.

    “The fact that Ghana can issue domestically again gives policymakers breathing room,” said one emerging markets analyst. “There is no immediate reason to rush back into expensive foreign currency borrowing simply to prove market access.”

    With global bond yields still elevated and memories of the recent debt crisis fresh, Ghana’s policymakers appear determined to prioritise affordability and sustainability over a symbolic return to the Eurobond market.

     

     

     

  • Ghana exits IMF financing program, pivots to ‘Policy Coordination’ era

    Ghana exits IMF financing program, pivots to ‘Policy Coordination’ era

    By Adnan Adams Mohammed

    After three years of rigorous fiscal discipline, high-stakes negotiations, and a domestic debt exchange that reshaped the financial landscape, Ghana has officially closed the chapter on its Extended Credit Facility (ECF) with the International Monetary Fund (IMF).

    The government has confirmed that the nation is shifting away from direct IMF financing, opting instead for a “non-financing” support structure.

    This transition marks a pivotal moment in Ghana’s economic history, as the country attempts to prove to international markets that it can maintain fiscal sanity without a “policeman” holding the purse strings.

    The successful 6th review

    The decision follows the conclusion of the 6th and final review of the ECF program in Accra this month. While the IMF mission team noted “significant progress” in restoring macroeconomic stability, they did not leave without a word of caution.

    “Ghana has shown remarkable resilience. We see inflation trending downward and a stabilization of the primary balance,” the IMF mission lead stated during the closing press conference. “However, lingering concerns remain regarding the energy sector debt and the need for consistent revenue mobilization. The exit from a financing program does not mean an exit from discipline.”

    For many Ghanaians, the end of the program is met with a mixture of relief and skepticism. The IMF years were characterized by a “tax-heavy” regime that saw the introduction of several new levies measures that critics say pushed mining taxes into a “danger zone” and left only 32% of salaried workers able to save.

    The PCI: The new front-runner

    As Ghana weighs its post-IMF pathways, the Policy Coordination Instrument (PCI) has emerged as the clear front-runner. Unlike the ECF, the PCI does not come with a cash injection. Instead, it serves as a “seal of approval” for a country’s economic policies, signaling to investors and credit rating agencies that the government remains committed to reform.

    “The PCI is essentially a signaling tool,” explained Dr. Richmond Atuahene, a banking and economic consultant. “By signing up for this, the government is telling the world, ‘We don’t need your money anymore, but we still want you to grade our homework.’ It is a strategic move to keep the cost of borrowing low as we return to the international capital markets.”

    The shift to a non-financing program is seen as a necessary evolution. “We cannot stay on a ventilator forever,” noted a senior official at the Ministry of Finance. “The goal was always to stabilize, recover, and then walk on our own feet. The PCI provides the framework to ensure we don’t stumble back into the habits that led us to the 2023 crisis.”

    Lingering concerns amid progress

    Despite the optimistic outlook from government quarters, independent analysts warn that the “structural weaknesses” of the Ghanaian economy have not been fully cured. The National Development Planning Commission (NDPC) has recently pushed for a “Job-First” agenda, arguing that macroeconomic indicators mean little if they do not translate into living wages and employment.

    “We are exiting the program at a time when the labor market is still very fragile,” said Adnan Adams Mohammed, an economic analyst. “The IMF may be happy with our debt-to-GDP ratio, but the man on the street is still dealing with high fuel costs and a lack of disposable income. The transition to a PCI must prioritize social safety nets, not just fiscal balance sheets.”

    A test of sovereignty

    The move to non-financing support is, at its core, a test of Ghana’s economic sovereignty. For the first time in years, the government will have more room to maneuver, particularly with an election cycle on the horizon a period historically known for budget overruns in Ghana.

    “This is the real test,” says Dr. Elias Preko. “Can the government maintain the discipline of the last three years without the threat of the IMF withholding a disbursement? If we pass this test, Ghana’s credibility will be restored. If we fail, we will be back at the IMF’s door within 24 months.”

    As the ECF program officially winds down in 2026, the eyes of the global financial community are fixed on Accra. The transition to the Policy Coordination Instrument represents a bold bet that Ghana has finally learned the lessons of its 17th bailout.

    Whether this “non-financing” era leads to genuine prosperity or a return to old habits remains the most pressing question for the “Gold Coast” in the years to come.

     

     

     

     

     

  • Govt looks away from Eurobond market …prefers to stick with domestic bonds for now

    Govt looks away from Eurobond market …prefers to stick with domestic bonds for now

    By Toma Imirhe

    Fiscal decision makers have decided that Ghana’s government should pivot away from the international sovereign bond market and back towards domestic debt issuance, following the strong market reception for its recent seven-year cedi-denominated bond issue which attracted robust investor demand despite offering a coupon rate of just 12.5%, which is just two-thirds of the coupon rates the country was paying on similar securities before being forced off the market in late 2022.

    Indeed, a government statement last Friday confirmed that government is in no rush to return to the Eurobond market. This will put paid to speculations as to when and on what terms, Ghana would return to the Eurobond market now that it’s enforced three year hiatus has ended.

    The recent domestic bond issue, which was oversubscribed and attracted bids of over GHc3 billion, has strengthened official conviction that the domestic market can once again serve as a major source of medium-term financing without exposing the country to the foreign exchange risks that ultimately precipitated Ghana’s debt crisis and eventual restructuring under the G20 Common Framework.

    Senior officials at the Ministry of Finance and analysts in the local capital market say the success of the latest issuance is reshaping government’s borrowing strategy at a time when access to the Eurobond market remains prohibitively expensive for frontier economies such as Ghana.

    Government’s recently announced plans to issue domestic bonds to finance cocoa purchases for the upcoming crop season is being viewed by market participants as a practical demonstration of the new strategy. Traditionally, cocoa syndicated loans sourced from international banks have provided foreign currency financing for purchases by the Ghana Cocoa Board, but officials are now increasingly exploring local currency alternatives to reduce external vulnerabilities.

    “The recent bond issuance is a major signal that confidence in the domestic market is returning,” a senior official at the Ministry of Finance has said. “The appetite shown for the seven-year instrument demonstrates that investors are willing to take medium-term Ghana risk again.”

    Government’s decision is also predicated on the stronger confidence that investors have in Ghana’s domestic issuances than they have in its international ones, because of the terms applied in the restructuring of both. The latest domestic issuance came after the completion of Ghana’s Domestic Debt Exchange Programme (DDEP), under which local bondholders accepted lower coupons and extended maturities but did not suffer reductions in principal amounts invested. That contrasts sharply with the treatment meted out to holders of Ghana’s Eurobonds, who incurred substantial haircuts under the country’s external debt restructuring agreement.

    Market analysts say this distinction has become critical in restoring local investor confidence.

    “Domestic investors took pain during the DDEP, but they retained confidence because principal was preserved,” says an Accra-based fixed income strategist at an international investment bank. “Eurobond investors, on the other hand, suffered deep losses and remain wary of Ghana’s sovereign risk profile.”

    Indeed, the government’s recent success in raising long-term domestic funding has reinforced concerns within official circles over the cost of returning prematurely to international capital markets at a time of dented confidence in Ghana and wider monetary tightening globally.

    Before Ghana suspended payments on most of its external debt in late 2022, the country had become one of Africa’s most active Eurobond issuers, regularly tapping global markets for billions of dollars to finance infrastructure, budget deficits and liability management operations.

    However, those borrowings became increasingly unsustainable as the cedi weakened sharply, foreign exchange reserves dwindled and global interest rates surged following aggressive monetary tightening by the United States Federal Reserve and other major central banks responding to post-pandemic inflation.

    Current geopolitical tensions in the Persian Gulf and Eastern Europe are adding renewed inflationary pressures globally through higher energy and logistics costs, further reducing the likelihood of meaningful interest rate cuts in developed economies anytime soon.

    Analysts estimate that if Ghana attempted a fresh Eurobond issue in current market conditions, investors could demand yields of between 13% and 16% in dollar terms levels that many economists argue would be fiscally dangerous.

    “Any new Ghana Eurobond today would almost certainly price in the mid-teens,” says an economist at Databank Group. “When you add the exchange rate risk and the country’s recent default history, the effective cost becomes extraordinarily high.”

    At such rates, a new Eurobond could ultimately cost government far more than domestic borrowing, especially if the cedi depreciates significantly over the lifespan of the debt.

    That concern is now influencing policy thinking.

    “This is about reducing forex exposure within public sector financing structures,” asserts a treasury analyst at a local commercial bank. “Government has realised that excessive dollar borrowing creates severe refinancing and currency risks during periods of external shocks.”

    Nonetheless, analysts caution that relying too heavily on domestic borrowing also carries risks, particularly the possibility of crowding out private sector access to credit if banks and institutional investors channel disproportionate funds into government securities.

    “There is still a balancing act required,” notes an economist at Institute of Statistical, Social and Economic Research. “Domestic borrowing is safer from a currency standpoint, but overdependence can constrain private sector lending and economic expansion.”

    Consequently, financial experts say Ghana may increasingly explore alternative international debt instruments capable of providing foreign exchange financing at lower costs than conventional Eurobonds.

    Among the options being discussed are Diaspora Bonds targeted at Ghanaians living abroad. Such instruments have been used successfully by countries including India and Israel to mobilise relatively stable foreign currency funding from patriotic investors willing to accept lower yields than mainstream international markets demand.

    Analysts say Ghana could potentially raise several hundred million dollars through a well-structured Diaspora Bond, particularly if linked to identifiable development projects or enhanced with tax incentives.

    However, concerns remain over credibility and trust following Ghana’s recent debt restructuring, which may limit appetite unless strong legal protections are provided.

    Another option under consideration is the issuance of Panda Bonds in China’s domestic capital market. Panda Bonds allow foreign governments and corporations to raise renminbi-denominated financing from Chinese investors.

    Financial analysts argue such instruments could diversify Ghana’s investor base while potentially securing lower interest rates than Western capital markets currently offer.

    But Panda Bonds also come with complications, including currency convertibility issues, regulatory requirements in China and the strategic implications of increasing exposure to Chinese financial markets.

    “There is no perfect solution,” says a sovereign debt analyst with a multinational advisory firm. “The key lesson from Ghana’s recent crisis is that the composition and structure of debt matter just as much as the amount borrowed.”

    For now, government appears convinced that the domestic market offers the most prudent path forward as it seeks to rebuild fiscal credibility and avoid repeating the vulnerabilities that pushed the country into default barely three years ago.

    The strong response to the recent seven-year bond may therefore mark not merely a successful issuance, but the beginning of a fundamental reorientation in Ghana’s sovereign financing strategy.

     

     

  • Govt approves ‘Accelerated Four-Month Payment’ plan to clear teacher arrears

    Govt approves ‘Accelerated Four-Month Payment’ plan to clear teacher arrears

    By Humu Shaibu

    In a move set to restore industrial harmony within the education sector, the Government has announced a structured, fast-track payment plan to settle all outstanding salary arrears owed to teachers across the country.

    The Deputy Minister for Finance, Thomas Ampem Nyarko, revealed the breakthrough during a stakeholder briefing, outlining a systematic disbursement schedule designed to conclude the long-standing debt by the end of the third quarter of 2026.

    The Disbursement Schedule

    According to the Deputy Minister, the strategy involves “batching” the payments to ensure teachers receive significant portions of their back-pay every 30 days. The rollout is scheduled as follows:

    ● May: Payment of four months of arrears.

    ● June: Payment of an additional four months of arrears.

    ● July: Payment of another four months of arrears.

    ● Ongoing: The cycle will repeat until the total outstanding debt is fully liquidated.

    “In May you will receive four months of arrears, June, you will receive another four months, July another four months, until the payments are concluded,” Hon. Ampem Nyarko stated, emphasizing the government’s commitment to the roadmap.

     A Boost for Teacher Morale

    The issue of arrears covering salary increments, promotions, and recruitment back-pay has been a point of friction between teacher unions and the state for several years. By committing to an accelerated four-month-per-month payout, the government aims to alleviate the financial pressure on educators and prevent potential industrial actions.

    Financial analysts suggest that this structured approach is intended to manage the state’s liquidity while providing teachers with a predictable and substantial influx of funds.

     Economic Context

    This intervention comes on the heels of several other fiscal measures aimed at cushioning public sector workers. The Ministry of Finance indicated that the funds have been ring-fenced to ensure that the schedule remains uninterrupted, regardless of other budgetary pressures.

    The leadership of the various teacher unions has expressed cautious optimism, noting that the timely execution of the May payments will be the first test of the government’s resolve.

     Looking Ahead

    The Deputy Minister urged teachers to remain dedicated to their classrooms, assuring them that the Ministry is working closely with the Controller and Accountant General’s Department (CAGD) to prevent any technical glitches during the disbursement process.

    As the first payments hit accounts next month, all eyes will be on the Ministry of Finance to see if this ambitious “4-4-4” formula finally closes the chapter on teacher arrears in Ghana.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Ghana returns to long-term debt market with landmark 7-year cedi bond

    Ghana returns to long-term debt market with landmark 7-year cedi bond

    By Adnan Adams Mohammed

    In a significant milestone for the nation’s economic recovery, the Government of Ghana has announced its first medium-to-long-term domestic bond issuance since the 2022 debt default.

    The Ministry of Finance revealed on Thursday that it will open books for a new 7-year cedi-denominated treasury bond starting Monday, March 30, 2026. The move marks the end of a three-year freeze on longer-dated debt following the country’s comprehensive Domestic Debt Exchange Programme (DDEP).

    Market confidence restored

    The issuance is being viewed by analysts as a “litmus test” for investor appetite and a signal that the government is ready to move beyond the era of emergency debt restructuring. According to the Ministry’s issuance calendar, the offer is open to both resident and non-resident investors.

    “The expiration of the DDEP-induced restrictions marks a pivotal moment for Ghana’s financial strategy,” the Ministry stated in an official release. “This auction is aimed at rebuilding a sovereign yield curve, supporting liquidity management, and restoring market confidence for both retail and institutional investors.”

    Since 2022, the government has relied almost exclusively on short-term Treasury bills (91-day to 364-day) to fund its budget. The return to the 7-year market indicates a shift toward more sustainable, long-term financing.

    Economic fundamentals

    The timing of the bond coincides with a period of relative macroeconomic stability. After peaking at over 54% in 2022, inflation has cooled significantly, with recent reports placing it at a near three-decade low. Additionally, the Bank of Ghana has aggressively cut the policy rate dropping 14 percentage points over the last year to the current 14%.

    “With market rates having fallen materially, the yield on this new bond will be closely watched,” said Samir Gadio, Head of Africa Strategy at Standard Chartered Plc. “While yields may not be as high as they once were, Ghana remains an attractive diversification play for overseas investors now that the currency has stabilized.”

    Issuance Details

    ● Opening Date: Monday, March 30, 2026 (9:00 AM)

    ● Closing Date: Wednesday, April 1, 2026 (3:00 PM)

    ● Settlement Date: Tuesday, April 7, 2026

    ● Minimum Bid: GHS 50,000

    ● Bookrunners: Absa, CalBank, Fincap, GCB, Stanbic, and OA.

    The coupon rate will be determined through a book-building process, where bids will be accepted on a yield basis.

    Strategic Outlook

    The administration has expressed gratitude to the Ghanaian people for their patience during the debt crisis. Government officials emphasized that the successful payment of several coupon rounds on restructured bonds since 2025 has been instrumental in clearing the path for this new issuance.

    Proceeds from the bond are expected to be used to refinance maturing obligations and support the government’s 30-billion-cedi development agenda for the 2026 fiscal year.

    As the IMF program nears its conclusion in August 2026, this return to the domestic capital market is seen as a crucial step toward fiscal self-reliance and the normalization of Ghana’s financial landscape.

     

  • Only 7 SOEs fully compliant with PFM Act – Finance Ministry reveals

    Only 7 SOEs fully compliant with PFM Act – Finance Ministry reveals

    By Adnan Adams Mohammed

    A startling new report from the Ministry of Finance has exposed a deep-seated culture of fiscal non-compliance within Ghana’s State-Owned Enterprises (SOEs), revealing that only seven out of dozens of entities are “highly compliant” with the Public Financial Management (PFM) Act.

    The disclosure, contained in the latest 2024 SOE Health Report, has sent shockwaves through the financial sector, raising urgent questions about oversight, accountability, and the potential risk these entities pose to the national purse.

    According to the Ministry, the small group of compliant entities has demonstrated rigorous adherence to financial reporting timelines, debt management protocols, and budget execution guidelines. While the Ministry did not immediately publish the full list of all reviewed entities, the “Highly Compliant” tier represents a fraction of the corporate landscape under the state’s umbrella.

    Compliance with the PFM Act is not merely a bureaucratic requirement; it is a legal safeguard designed to ensure that state entities—which control billions of cedis in public assets—do not operate in a vacuum of transparency.

    The non-compliance trap

    The vast majority of SOEs fell into the “Low” or “Moderate” compliance categories. The Ministry identified several recurring failures.

    One is delayed financial statements as many entities are years behind in submitting audited accounts

    Another is unapproved spending. Significant portions of expenditure were found to have been conducted without the necessary parliamentary or ministerial approvals.

    The third is inordinate debt accumulation, with the failure to report or manage inter-utility debts, which continues to create a “circular debt” crisis, particularly in the energy and water sectors.

    “State-Owned Enterprises are meant to be engines of growth, not liabilities to the taxpayer,” a senior official at the Finance Ministry stated. “The PFM Act is the law of the land. Operating outside of its boundaries is no longer an option.”

    Fiscal risks to the state

    The lack of compliance has direct implications for Ghana’s broader economic stability. Non-compliant SOEs often require government bailouts, which bloat the national deficit and divert funds from critical social sectors like health and education.

    International observers and credit rating agencies have frequently pointed to the “contingent liabilities” posed by SOEs as a major risk factor for Ghana’s debt sustainability. The Ministry’s report confirms that without a radical shift in management culture, these entities remain a “fiscal time bomb.”

    Sanctions on the horizon?

    The Ministry of Finance has signaled that the era of “gentle reminders” is over. Under the PFM Act, the Minister has the power to withhold budgetary support, block new loan agreements, and even recommend the removal of board members or management teams of non-compliant entities.

    The Director-General of the State Interests and Governance Authority (SIGA) is expected to work closely with the Ministry to enforce the “Performance Contracts” signed by SOE heads earlier this year.

    Expert reaction

    Financial analysts have called for the names of the non-compliant SOEs to be made public to provide “market discipline.”

    “Transparency is the first step toward reform,” said a local policy analyst. “If only seven are doing the right thing, we need to know what is happening in the boardrooms of the others. The taxpayer is the shareholder, and the shareholder deserves to know the truth.”

    As the government moves to tighten its grip on state entities, the focus remains on the “Elite Seven” as a blueprint for what is possible when professional management meets legal accountability. For the rest, the clock is ticking to get their houses in order.