News Guide Africa

Tag: Treasury Bills

  • 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.

     

  • Oversubscriptions resume in Ghana’s T-Bill market

    Oversubscriptions resume in Ghana’s T-Bill market

    By Toma Imirhe

    Even ahead of last week’s decision by the Bank of Ghana’s Monetary Policy Committee not to cut the benchmark Monetary Policy Rate any further from the 14% set in March, investor appetite for Government of Ghana treasury bills appears to have rebounded sharply over the past few weeks. With treasury bill yields unlikely to fall further over the coming weeks, this is putting paid to the erstwhile stretch of weak auctions that had raised concerns over the state’s short-term financing programme and the sustainability of declining yields in the domestic debt market.

    Auction results released by the Bank of Ghana show that the May 8 and May 15, 2026 auctions were both oversubscribed, marking a turnaround from the under-subscriptions and sizeable bid rejections that characterised much of April.

    According to auction data, the May 8 sale recorded total bids of nearly GH¢7.8 billion against a target of about GHc4.3 billion, representing an oversubscription of roughly 80%. The 91-day bill dominated demand with GHc5.72 billion in bids, of which GHc4.37 billion was accepted. The 182-day bill attracted GHc650 million in bids, with GHc570 million accepted, while the 364-day bill received GHc1.46 billion worth of bids, out of which GHc1.14 billion was taken up.

    The subsequent May 15 auction sustained the renewed momentum, with investors continuing to pile into the short end of the yield curve despite moderating interest rates. The total amount tendered was GHc5.80 billion against a target of GHc4.30 billion resulting in a 34.8% oversubscription, with the government accepting GHc5.48 billion worth of bids. For 91 day bills GHc3.83 billion was tendered and GHc3.65 billion was accepted. For 182 day bills, GHc709.83 million was tendered and GHc671.72 million was accepted. For 364 day bills, GHc1.26 billion was tendered, and GHc1.15 billion was accepted.

    Analysts say the reversal reflects a combination of improving macroeconomic sentiment, excess banking sector liquidity and rising caution among institutional investors regarding longer-dated government securities being traded on the Ghana Fixed Income Market’s secondary market.

    “The market is gradually regaining confidence in government paper after the uncertainty created by the domestic debt restructuring exercise,” said a fixed income dealer at a leading Accra-based investment bank last week. “Most investors are still unwilling to lock funds into long-dated bonds, so treasury bills remain the preferred safe haven.”

    The dominance of the 91-day instrument remains striking. In both the May 8 and 15 auctions, the shortest tenor accounted for well over 70 percent of total bids submitted. Analysts attribute this preference to lingering investor caution after the Domestic Debt Exchange Programme (DDEP), under which holders of medium and long-term bonds suffered maturity extensions and coupon reductions.

    Although treasury bills were exempted from the DDEP, investors remain wary of duration risk and prefer instruments that mature quickly and can be rolled over frequently.

    “The preference for the short end is rational,” noted an Accra-based treasury manager at the weekend. “Investors want liquidity, flexibility and minimal exposure to future policy uncertainty. The 91-day bill offers all three.”

    Recent auction data show yields stabilising at much lower levels than those prevailing earlier in the year.

    The rally in treasury bill demand follows Ghana’s improving macroeconomic outlook under the International Monetary Fund-supported reform programme that the country exited two weekends ago. The recent upgrade of Ghana’s sovereign credit rating by Fitch Ratings to B with a positive outlook has further boosted investor confidence in government securities.

    Finance Minister Cassiel Ato Forson has repeatedly argued that the government’s fiscal consolidation programme is beginning to yield results, citing stronger revenue mobilisation, the sharp decline in inflation and improved exchange rates.

    At the same time, liquidity conditions within the banking sector remain elevated. Many banks and institutional investors have accumulated sizeable cedi balances amid relatively weak private sector credit demand for viable uses, forcing them back into government securities despite lower yields.

    This excess liquidity partly explains why government has increasingly been able to reject bids aggressively in recent months while still meeting its financing requirements. Between January and April 2026, government reportedly mobilised about GH¢120.2 billion from the treasury bill market against bids worth more than GH¢181 billion submitted by investors.

    Indeed, some analysts argue that the earlier under-subscriptions witnessed in April were not entirely demand-driven but also reflected strategic bid rejections by the Treasury as it sought to force yields lower.

    “The government deliberately became selective about the rates it was willing to accept,” says one market analyst. “That initially discouraged some investors, but the market has now adjusted to the new yield environment.”

    The current structure of demand also highlights persistent segmentation within Ghana’s domestic debt market. While treasury bills continue attracting strong interest, appetite for medium and long-term bonds remains subdued, forcing government to rely heavily on short-term borrowing.

    That strategy carries refinancing risks because large volumes of debt mature every few months. However, analysts say the Treasury currently prefers the flexibility of short-term financing while waiting for confidence in the long end of the market to recover.

    Over the next two to three months, market watchers expect treasury bill issuance volumes to remain elevated as government continues refinancing maturing obligations and funding budget operations. However, most analysts forecast that oversubscriptions are likely to persist, especially for the 91-day tenor.

    Short-term rates could trend gradually lower if inflation continues easing and the cedi remains relatively stable, although neither of those are a given, due to the global price shocks currently being experienced by Ghana that are emanating from unresolved tensions in the Persian Gulf – and which have persuaded the BoG to pause the monetary easing it began in July 2025..

    Current market expectations suggest the 91-day bill’s yield could still possibly decline marginally over the next couple of months if oversubscriptions persist, although the 182-day and 364-day instruments may remain relatively sticky because investors will continue demanding a premium for longer maturities.

    The outlook will nevertheless depend heavily on fiscal discipline by government and monetary policy decisions by the Bank of Ghana. Any renewed exchange rate pressure, acceleration in inflation or deterioration in government financing conditions could quickly reverse the recent decline in yields.

    For now, however, Ghana’s treasury bill market appears to have regained momentum after several uncertain weeks, offering government a critical source of domestic financing having exited its three-year IMF programme

     

  • Ghana’s Turnaround: How a GH¢15bn Central Bank Intervention Succeeded Where GH¢60bn Losses Failed To Spark Growth 

    Ghana’s Turnaround: How a GH¢15bn Central Bank Intervention Succeeded Where GH¢60bn Losses Failed To Spark Growth 

    “From Survival to Expansion: Businesses Finally Breathe Again”

    Ghana’s economy may be teaching one of the harshest lessons in modern finance:

    A bigger loss does not always produce a bigger recovery.

    Just three years ago, Ghana’s economy stood at the edge of a financial cliff. The Central Bank absorbed losses exceeding 60 billion Ghana cedis during the peak of the economic crisis. The financial system was protected, the markets were stabilized, and the economy avoided collapse.

    But for businesses, the pain never ended;

    1. Borrowing costs remained at over 30% to 40%.

    2. Treasury bill rates exploded.

    3. Factories slowed

    4. SMEs struggled to survive

    5. Private sector growth nearly disappeared

    6. Interest rates crossed painful territory

    7. Inflation surged above crisis levels.

    And while the Bank of Ghana absorbed losses exceeding GH¢60 billion during the financial crisis and Domestic Debt Exchange Programme (DDEP) era, many businesses still asked a painful question:

    “If the system was rescued, why was borrowing still killing industries?”

    Today, the conversation has changed.

    A newer wave of interventions estimated around GH¢15 billion in monetary and liquidity management costs is now being credited with creating one of Ghana’s most business-friendly financial environments in years.

    And this time, the impact is being felt not only in banking halls, but inside factories, farms, trading markets, and industrial value chains. And now businesses are beginning to talk about expansion again instead of survival.

    The uncomfortable national question now emerging is simple:

    How did Ghana lose over 60 billion Ghana cedis and still struggle to create growth… Yet a 15 billion Ghana Cedis intervention is beginning to revive confidence across the economy?

    THE DIFFERENCE BETWEEN “SURVIVAL” AND “GROWTH”

    Economists now describe Ghana’s 2022–2023 intervention period as a “system survival phase.”

    But what does it mean in practical terms?

    It means the system was kept alive but not necessarily made comfortable to operate in.

    The priority was clear:

    1. Prevent collapse

    2. stabilize the currency

    3. control inflation

    4. and keep banks functioning

    This objectives was almost achieved and prevented systematic collapse.

    But there was a trade-off.

    Stability came with tight conditions that pushed pressure onto businesses:

    1. Interest rates remained high

    2. Credit was expensive

    3. Liquidity was restricted

    4. Treasury bill rates were extremely high

    So while the system was stabilized, access to affordable financing remained limited.

    Survival meant the economy could function.

    Growth means the economy becomes worth investing in.

    During that phase, businesses could stay open but struggled to expand.

    They operated but did not advance and found it difficult to make profit.

    The system was protected but growth was effectively absent because Growth requires more than stability, it requires:

    1. Affordable capital

    2. Predictable conditions

    3. and room to take risk

    “THERE WAS NO REAL PROFIT LEFT”

    At the peak of the crisis, many businesses found themselves operating in what could be described as a financial squeeze zone.

    Consider a medium-sized factory borrowing at:

    38% interest rate

    while:

    1. paying taxes

    2. utility costs

    3. logistics

    4. payroll

    5. and raw material inflation

    Businesses often found itself operating only to survive debt obligations.

    Because once financing costs rise to that level, something fundamental changes;

    Profit is no longer driven by efficiency or demand, it is consumed by the cost of money itself.

    In such an environment, even well run businesses struggle because:

    1. Strong sales no longer guarantee profitability

    2. Demand no longer translates into expansion

    This created a system where firms were technically active but economically constrained.

    They could produce but not scale.

    They could sell but not reinvest.

    Many SMEs reduced expansion plans.

    Others delayed hiring.

    Some industries operated below capacity despite strong market demand.

    And that is where the phrase “There was no real profit left” becomes more than just a complaint.

    A financial analyst explained:

    “The 2022 intervention saved the banking system, but not necessarily business expansion. The economy was stabilized, but growth remained constrained.”

    THE NEW INTERVENTION IS DIFFERENT

    Today, the conversation has changed.

    A newer wave of intervention estimated around 15 billion Ghana Cedis in monetary and liquidity management cost is now being credited with creating one of Ghana’s most business friendly financial environment in years.

    And this time, the difference is not just in policy but in impact.

    The current intervention phase appears to be delivering what businesses were waiting for:

    1. Lower inflation

    2. Falling Treasury bill rates

    3. Improved cedi stability

    4. Reduced pressure on lending rates

    5. Stronger liquidity conditions

    For the first time in years, stability is beginning to feel usable.

    The results are now visible across multiple sectors:

    1. Agribusiness

    2. Manufacturing

    3. Trade

    4. Telecom

    5. Fintech

    6. Export industries

    7. and SME expansion.

    T-BILL COLLAPSE CHANGES EVERYTHING

    One of the biggest shifts has been the dramatic fall in Treasury bill yields.

    For years, banks preferred lending to government because returns were extremely high and risk-free.

    Private sector financing suffered.

    Now, with Treasury bill rates falling sharply:

    1. Banks are being pushed toward productive lending

    2. Industries become attractive again

    3. And private sector expansion regains momentum.

    Some analysts argue this shift should have happened earlier.

    But its impact now is undeniable.

    This may become one of the biggest structural shifts in Ghana’s financial sector in over a decade

    FACTORIES MAY FINALLY RUN 24 HOURS

    Lower financing costs could significantly impact Ghana’s industrialization agenda.

    Large agro-processing projects, export factories, and value-chain financing structures now have greater chances of success under cheaper financing conditions.

    Not necessarily because demand has suddenly increased but because financing is no longer a barrier to meeting that demand.

    Sectors expected to benefit include:

    1. Fruit processing

    2. Food manufacturing

    3. Logistics

    4. Housing

    5. Renewable energy

    6. And digital commerce ecosystems

    Industry players say the new environment could support:

    1. Expanded production lines

    2. Grower financing

    3. Machinery upgrades

    4. Export competitiveness

    5. And job creation.

    A MAJOR TEST FOR BANKS

    The falling rate environment is also exposing weaknesses within the banking industry.

    For years, high inflation and government borrowing created unusually profitable conditions for passive Treasury investments.

    Now the environment is shifting

    Banks may need to:

    1. Innovate

    2. Finance value chains

    3. Support SMEs

    4. Partner fintechs

    5. And build industrial financing products.

    In other words, profitability may now depend on real economic engagements not just passive returns.

    Analysts believe the future winners will be banks that move aggressively into:

    1. Agriculture.

    2. Manufacturing

    3. Telecom-driven finance

    4. Digital payments

    5. And structured value-chain lending.

    GHANA MAY BE ENTERING A NEW ECONOMIC PHASE

    The current environment is increasingly being described as “The transition from crisis management to growth activation.”

    With inflation easing, Treasury bill rates started falling and cedi showing signs of stability. Businesses are beginning to experience something that had been absent for years.

    Industries are gradually regaining confidence.

    Private sector activity is picking up

    Expansion is becoming realistic again.

    If this stability continues:

    1. Industries may expand faster

    2. Exports could improve

    3. Employment may rise

    4. And private sector confidence could strengthen significantly.

    After years of economic pain and years of operating in survival mode, many businesses are finally seeing something they had almost forgotten:

    The possibility of affordable growth.

     

     

     

     

     

     

     

     

  • Investors diversifying away from T bills

    Investors diversifying away from T bills

    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.

     

     

  • Ghana Reference Rate hits 10% as banks pivot to real economy

    Ghana Reference Rate hits 10% as banks pivot to real economy

    By Adnan Adams Mohammed

    Ghana’s financial landscape is undergoing a radical transformation as the Ghana Reference Rate (GRR) plummeted to a historic low of 10.06% as at last week.

    The drop, fueled by consistent disinflation and aggressive monetary easing, has signaled the beginning of a “cheap credit” era, forcing banks to abandon their reliance on government securities and look toward the private sector.

    For years, Ghanaian businesses have complained of “crowding out,” where banks preferred the safety of high-interest Treasury bills over the perceived risks of lending to local entrepreneurs. However, with Treasury returns now falling in tandem with the GRR, that dynamic is shifting.

    The great pivot to the private sector

    Farihan Alhassan, a prominent banking executive, has noted that the era of “easy money” from government paper is fading. As yields on Treasury bills lose their luster, financial institutions are being pushed to deploy their liquidity into the real economy.

    “The low-interest environment is effectively forcing banks to go back to their core mandate: lending,” Alhassan stated. “We are seeing a strategic shift where credit is finally flowing into manufacturing, agriculture, and SMEs. The focus has moved from government desks to the shop floors of Ghanaian businesses.”

    Relief for borrowers, risks for lenders

    The drop to 10.06% is expected to trigger an immediate reduction in the cost of existing floating-rate loans, providing much-needed breathing room for debt-burdened companies and households. Analysts predict that if inflation continues its downward trend, the GRR could hit single digits by the end of the year.

    However, this transition is not without its detractors. While the prospect of affordable credit is being celebrated by the business community, some industry veterans are sounding the alarm on the potential for “costly consequences.”

    The “subprime” warning

    In a stark counter-narrative, the Managing Director of GCB Bank, Kofi Adomakoh, has warned that the rush to lend in a low-interest era could lead to a subprime lending crisis. The concern is that in the desperate search for yield, banks might lower their credit standards and lend to over-leveraged or unviable businesses.

    “Cheap credit is a double-edged sword,” the GCB MD cautioned. “While it fuels growth, it also creates an environment where risk can be mispriced. If we are not careful, the ‘low-interest era’ could seed the next crop of non-performing loans (NPLs) if credit is extended without rigorous due diligence.”

    A new economic chapter

    Despite the warnings, the prevailing sentiment on the streets of Accra is one of cautious optimism. For the first time in a decade, the dream of affordable capital for Ghanaian-owned industries seems within reach.

    The Bank of Ghana is expected to monitor the situation closely, balancing the need for economic stimulation with the stability of the banking sector. For now, the message to the private sector is clear: the vaults are opening, but the scrutiny will be tighter than ever.

    Key market movements:

    Ghana Reference Rate (GRR): 10.06% (Down from 12.5% in Q1).

    Forecast: Further cuts expected as inflation stabilizes.

    Banking Trend: Increased allocation to private sector credit portfolios.

     

     

  • Ghana’s shift from public spending to T-Bills

    Ghana’s shift from public spending to T-Bills

    By Adnan Adams Mohammed

    The latest Monetary Policy Report from the Bank of Ghana (BoG) paints a stark picture of a shifting financial landscape.

    For years, the public sector was the primary engine of credit consumption, but 2025 marked a definitive pivot. Under the stewardship of Governor Dr. Johnson Asiama, the central bank, has revealed that credit to the public sector contracted by a staggering 25.5%, falling to GH¢4.8 billion by the end of December 2025.

    This isn’t just a data point; it is a signal of a significant slowdown in government activities and a radical restructuring of how Ghanaian banks manage their risks.

    A retreat from public lending

    The contraction in public sector credit suggests a government that is either tightening its belt or is being crowded out. While the private sector (households and enterprises) saw a nominal growth of 19.2% to reach GH¢106.2 billion, the “real term” reality is less optimistic. When adjusted for economic pressures, private sector credit actually slumped compared to 2024.

    Total gross loans and advances across the industry grew by only 16.2% in 2025, a noticeable dip from the 24.1% growth seen the previous year.

    The T-Bill fortress

    If banks aren’t lending as aggressively to the public or private sectors, where is the money going? The answer lies in the safety of government paper.

    In a dramatic shift of investment strategy, Treasury bills now constitute the lion’s share of bank portfolios. Their share jumped from 40.3% in 2024 to a dominant 62.3% in 2025. Meanwhile, long-term securities often the bedrock of sustainable development funding plummeted from 59.3% to 37.2%.

    This “flight to T-bills” reflects a banking sector that is prioritizing liquidity and short-term security over long-term risk.

    Who is getting the cash?

    Despite the overall tightening, the distribution of available credit remains heavily concentrated in a few specific pillars of the economy. Three sectors now command 72.1% of all credit:

    Sector Dec 2025 Share (%) Dec 2024 Share (%)

    Services 37.1% 31.7%

    Commerce & Finance 24.3% 27.0%

    Manufacturing 10.7% 10.5%

    The Services sector has emerged as the clear winner, seeing a nearly 6% increase in its share of the pie. Conversely, vital infrastructure sectors like Electricity, Water, and Gas saw their share dwindle to a mere 3.0%, raising questions about the future of utility expansion and reliability.

    The funding crunch

    The report also highlights a subtle shift in how banks are funded. Deposit growth has slowed, with the share of deposits in total liabilities falling to 72.8%. To compensate, banks have increased their borrowings and leaned more heavily on shareholders’ funds, which improved to 13.1% of total funding.

    “The growth moderation recorded during the reference period is a reflection of a broader economic recalibration,” the BoG report suggests.

    The bottom line

    Ghana’s financial sector in 2026 is waking up to a “new normal.” The government is taking less credit, banks are playing it safe with T-bills, and the Services sector is the anchor. For the average entrepreneur in manufacturing or utilities, however, the message is clear: the credit tap is significantly tighter than it was a year ago.

    As Ghana moves further into 2026, the challenge for Dr. Asiama and the BoG will be to ensure that this “moderation” doesn’t turn into a stagnation that stifles the very growth the country needs.

     

     

     

     

     

     

     

  • Ghana’s Economic Resurgence: Gov’t delivers robust 2025 fiscal performance and broad-based macroeconomic turnaround

    Ghana’s Economic Resurgence: Gov’t delivers robust 2025 fiscal performance and broad-based macroeconomic turnaround

    In what is being hailed as one of the most significant economic recoveries in the nation’s history, the Government of Ghana has announced a sweeping macroeconomic turnaround for the 2025 fiscal year.

    Just over a year ago, the country faced a daunting economic landscape. By the end of 2024, the primary balance sat at a deficit of 3.0% of GDP, the 91-day Treasury bill rate was stifling at 27.7%, and the cedi had plummeted by 19.2% against the US dollar. However, today’s figures tell a vastly different story of recovery and resilience.

    Through a rigorous combination of fiscal discipline, deepened structural reforms, and prudent monetary policy, the Mahama administration has successfully placed public finances back on a sustainable path.

    The 2025 fiscal outcomes have consistently outperformed targets:

    ● Primary Balance: Recorded a surplus of 2.6% of GDP, significantly exceeding the 1.5% target.

    ● Overall Fiscal Balance: The deficit was narrowed to 1.0% of GDP (on a commitment basis), far better than the projected 2.8%.

    1. ● Debt Reduction: In one of the sharpest declines in Ghana’s history, the public debt stock was slashed by GH¢82.1 billion. Debt-to-GDP has fallen from 61.8% in 2024 to 45.3% in 2025.

    A Rebound Across All Indicators

    The turnaround is not limited to government ledgers; it is being felt across the broader economy. Real GDP growth strengthened to a provisional 6.1% in the first three quarters of 2025, with the non-oil sector growing at an even more impressive 7.5%.

    Key Highlights of the Turnaround:

    ● Inflation Crash: Inflation has fallen for thirteen consecutive months, dropping from 23.5% in January 2025 to a mere 3.8% in January 2026.

    ● Currency Strength: The Ghana cedi staged a remarkable comeback, appreciating against the US dollar by 40.7% by the end of 2025.

    ● Interest Rates: The 91-day Treasury bill rate plummeted from 27.7% to 6.5%, drastically reducing the cost of borrowing for both the government and the private sector.

    ● Trade & Reserves: The current account surplus swelled to US$9.1 billion, while gross international reserves reached US$13.8 billion enough to cover 5.7 months of imports.

    Empowering the Private Sector

    The cooling of the economy has provided much-needed oxygen to Ghanaian businesses. Commercial bank lending rates dropped from 30.25% to 20.45% over the past year. This shift saw credit to the private sector expand by GH¢17.1 billion in 2025, a trend the government expects to accelerate through 2026.

    “The macroeconomic turnaround is broad-based and comprehensive,” the government statement noted. “All sectors of the Ghanaian economy have witnessed remarkable improvement.”

    Commitment to Transformation

    President John Dramani Mahama’s administration has reaffirmed its commitment to sustaining these hard-won gains. The focus now shifts toward leveraging this newfound stability to drive job creation and long-term economic transformation.

    With inflation at record lows and the currency stabilizing, the government maintains that the foundation has been laid for a new era of Ghanaian prosperity.

     

     

     

  • GSE market capitalization hits GH¢172bn in December 2025, a 54.50% growth

    GSE market capitalization hits GH¢172bn in December 2025, a 54.50% growth

    The market capitalization on the Ghana Stock Exchange (GSE) rose by 54.50% from GH¢111.35 billion at the end of 2024 to GH¢172 billion by the close of December 2025.

    According to the summary of market report for 2025, the Equity Market closed the year with the GSE Composite Index reaching 8,770.25 points with a return of 79.40%, the highest since 2004.

    The Financial Stock Index ended the year with 4,647.17 points, returning 95.19%, and recording its highest return since its introduction in 2011.

    Trade values increased by 73.75% to GH¢3.74 billion compared to the previous year.

    The top ten price gainers for the year were Clydestone (GH) PLC (1,433.33%); SIC Insurance Company PLC (344.44%); Ecobank Ghana PLC (284.62%); GCB Bank PLC (215.70%); Access Bank Ghana PLC (211.54%); TotalEnergies Marketing Ghana PLC (207.16%); Societe Generale Ghana PLC (199.33%); Cocoa Processing Co. PLC (150.00%); Ecobank Transnational Inc. (148.39%) and Benso Oil Palm Plantation PLC (120.98%).

    The only loser on the market was Mega African Capital PLC (-3.35%).

    Meanwhile, the year-to-date total traded volume on the Ghana Fixed Income Market reached a record GHc245.8 billion, marking a strong 41.29% increase over the GHc174 billion recorded in the same period last year. This exceeded the pre-Domestic Debt Exchange Programme volume of GHc230 billion in 2022.

    Treasury Bills accounted for 25.14% of the total volume traded, while Government Notes and Bonds contributed 69.12%, with Corporate Bonds making up the remaining 5.73%.

     

     

     

     

     

     

     

     

     

     

  • T-bill demand: Auction undersubscribed by 50% as yields slip

    T-bill demand: Auction undersubscribed by 50% as yields slip

    Treasury bills continued to face weak demand as last fortnight’s primary auction recorded another shortfall in subscription.

    Data from the auction show investors tendered a total of GH¢3.5 billion across the 91-, 182-, and 364-day bills. Of this amount, the Treasury accepted GH¢3.39 billion, falling short of the GH¢6.72 billion target by 50 percent.

    A breakdown of the bids indicates that GH¢2.01 billion out of GH¢2.05 billion was accepted on the 91-day bill.

    For the 182-day bill, GH¢1.12 billion was taken from GH¢1.14 billion submitted, while the 364-day bill saw GH¢194 million accepted out of GH¢321 million in bids.

    Though some analysts attribute these persistent undersubscription to weak demand amid other attractive competitive instruments, the continuous low uptake raises deeper questions about what is driving the decline in investor appetite.

    Meanwhile, yields on all three maturities edged down slightly.

    The 91-day yield slipped 9 basis points to 10.32 percent from 10.41 percent. The 182-day dropped 1 basis point to 12.37 percent, while the 364-day also fell 1 basis point to 12.99 percent.

  • Analysts predict single digit inflation by Q3 amidst threat from utilities price hike

    Analysts predict single digit inflation by Q3 amidst threat from utilities price hike

    Ghana’s inflation has taken a sharp nosedive in the past two months, falling from 21.2 % in April to 13.7 % in June, after recording 18.4 % in May.

    Based on the recent development, analysts predict that inflation rate could return to single digit by September 2025 beating the government’s own target of mid-2026.

    The 13.7% June inflation is the lowest since December 2021 and also is nearing the end-year target of 11.9%.
    The Head of Finance at Merban Capital attributes the downward trend to a combination of factors, including sustained cedi stability, a tight monetary policy stance by the Bank of Ghana and falling yields on the Treasury bill market, which continue to absorb excess liquidity from the system.

    “All these three factors actually contributed towards the disinflationary pressure. And this can continue even into the third quarter, where we may end up hitting single digit inflation”, Nelson Cudjoe Kuagbedzi noted in a radio interview last week.

    “As I did indicate, 11.9% is the target for the year. But having achieved 13.7% as at second quarter, we may end up hitting single digit by September 2025. And this is good news for businesses, good news for individuals, and good news for the government. This inflation rate is going to provoke a lot of activity within the money market”, he added.

    However, the Ghana Statistical Service is concerned about price pressures from rent, electricity, refuse disposal, charcoal, and yam which remain the top five price pressure points driving inflation.

    Unexpectedly, refuse disposal, despite its small weight of just 0.5% in the inflation basket, saw a staggering year-on-year price surge of 130.9%, making it one of the biggest contributors to the overall rate.

    Meanwhile, Government Statistician Dr. Alhassan Iddrisu, has noted that sustained disinflation presents a crucial opportunity to shift from reactive price controls to more structural solutions.

    He is urging businesses to rethink their sourcing models, noting that: “With inflation on locally produced goods declining faster than imported ones, businesses can reduce exposure to global supply shocks by increasing local sourcing, especially for food, packaging, and logistics inputs.”

    “Businesses could practice strategic pricing, not sharp increases, given the disinflation and even month-on-month deflation as consumers are more price-sensitive.”

    In the face of rising food prices with staples like yam still among the top inflation drivers GSS also recommends changes in household purchasing behavior:

    “Households should lean into bulk purchases of staples, buy local produce where possible, and favor in-season vegetables, cereals, and proteins, which are experiencing sharper price drops.”

    As regional disparities in inflation persist, Dr. Iddrisu emphasized that economic policy must become more targeted:

    “Tailor social protection and economic policy by Region as blanket policies will not be effective given wide regional disparities in inflation.”

    The Government Statistician, while addressing a press conference, attributed the decline to what he described as a significant reduction in inflationary pressures that have weighed on the economy in recent months.

    “For the first time in a while, we are recording a month-on-month deflation of 1.2 percent between May and June, suggesting a real and sustained shift in price levels,” Dr. Iddrisu.

    Food inflation fell by 6.5 percentage points to 16.3 percent, down from 22.8 percent in May, while non-food inflation also eased to 11.4 percent from the previous 14.4 percent.

    However, regional disparities remain stark.

    The Upper West Region recorded the highest inflation rate at 32.3 percent, largely driven by rising food and utility costs. In contrast, the Bono Region posted the lowest at 8.4 percent.

    Dr. Iddrisu called for the use of more localized, granular data in policy planning to help address these regional imbalances and sustain the national disinflationary trend.

    The consistent decline over the past six months offers a hopeful sign for policymakers and businesses alike, especially as government targets single-digit inflation by early 2026

    By Adnan Adams Mohammed