Govt raises GH¢3.1bn in fresh domestic bond • Comeback signals return of investor confidence — Analysts
THE nation has made a return to the domestic bond market, raising GH¢3.1 billion in its first long-term issuance since the Domestic Debt Exchange Programme (DDEP) of 2022, a move analysts say signals restored investor confidence and readiness for a return to international capital markets.
On March 31, 2026, issued at a coupon rate of 12.5 per cent and maturing in March 2033, for its seven-year cedi-denominated bond, a development which marked government’s first major test of market appetite after the disruptions caused by the debt restructuring programme.
The successful uptake is being interpreted as an early sign of renewed confidence, underpinned by improving macroeconomic conditions and growing liquidity within the financial system.
In an exclusive interview with the Graphic Business, a Senior Lecturer at the University of Ghana Business School (UGBS), Dr Benjamin Amoah, described the successful issuance as a critical benchmark for Ghana’s future borrowing strategy.
“What we will see in terms of the success for the domestic market will give us an indication as to what it will be when we step onto the international capital market,” he said.
He considers the government’s renewed focus on the domestic market as a prudent strategy, particularly as it reduces exposure to exchange rate risks associated with external borrowing.
Dr Amoah said if managed effectively the successful bond issuance could pave the way for many more issuances and ultimately support the country’s re-entry into the Eurobond market.
“The Ministry of Finance, through the Bank of Ghana (BoG), must ensure that whatever the bond indenture says, they go by it. They must pay on time and honour the agreed rates,” he said.
The Senior Lecturer emphasised that consistency, transparency and fiscal discipline would be critical to sustaining investor confidence and consolidating the gains made so far.
Target yields within reach
The 12.5 per cent yield, which initially raised questions about feasibility, now appears to be aligned with prevailing market conditions.
With Treasury Bills rates trending downwards, investors are increasingly shifting their focus to longer-dated instruments that offer relatively higher returns.
This phenomenon, according to Dr Amoah, made the bond attractive to investors who seek to lock in yields over an extended period.
He stated that under such conditions, the government was well-positioned to mobilise funds locally, particularly as it reopened the long end of the yield curve after a prolonged absence.
Investor groups in focus
On the structure of the bond, Dr Amoah believes it attracted primarily institutional investors with long-term horizons.
For instance, he mentioned pension funds as the natural fit, given the long-term nature of their liabilities.
Similarly, mutual funds and insurance companies, were likely to participate as part of efforts to diversify their portfolios and optimise returns, as well as individual investors seeking to build wealth over time, Dr Amoah stated.
Banks, however, he said were expected to remain cautious due to the short-term nature of their liabilities and the need to maintain liquidity to meet depositor demands.
Global market return
Dr Amoah explained that beyond immediate financing, the bond issuance was a test case for Ghana’s eventual return to the international capital market.
He emphasised that the DDEP, while necessary for restoring debt sustainability, weakened investor confidence and disrupted the bond market.
“As a result, the success of this issuance carries significant weight in rebuilding credibility,” he stated, stressing that sustaining this momentum will depend on strict adherence to the terms of the bond.
He added that last Thursday’s issuance was a trust-building exercise, and hence any failure to meet coupon payment obligations could undermine future borrowing efforts.
Fiscal discipline
In a separate interview, the Executive Director for the Centre for Economic and Financial Analysis, Julius Gyimah, stressed the need for fiscal discipline and renewed investor confidence as government re-enters the domestic bond market.
He said although risks remained following the DDEP, improving macroeconomic conditions pointed to gradual recovery, stating that “risk has not completely disappeared, especially from a confidence perspective after the debt exchange, but we are seeing signs that the economy is stabilising.”
Mr Gyimah explained that declining inflation and policy alignment by the BoG were creating a more favourable environment for borrowing noting that government’s target of 12 per cent to 12.5 per cent was a deliberate move to ensure sustainability and restore investor interest.
“If you look at what government is offering now, the rates are more realistic and manageable. It gives investors some assurance while also ensuring government can meet its obligations,” he stated.
Prudent use of funds
“If we do not use these funds properly, we risk eroding the little confidence that is being rebuilt,” he said, cautioning that the success of the strategy would depend on how borrowed funds were utilised.
Therefore, he urged strict adherence to public financial management and procurement laws, stressing value for money and transparency.
“We have gone through painful experiences as a country. We cannot afford to repeat them,” he added.
Background
On March 30, government officially launched a 7-year cedi-denominated bond, its first issuance since 2022, following the lifting of restrictions under the DDEP introduced in 2023.
Investors are required to submit a minimum bid of GH¢50,000, with the offer open to both local and foreign participants.
The move is aimed at re-establishing a domestic funding programme, improving liquidity management and refinancing maturing debt.
Proceeds will support projects outlined in the 2026 budget, while participation is open to a broad range of investors and not just institutional players like pensions funds, insurance companies and asset managers.