Ghana’s Interest Rates Plunge by 23% as Investor Appetite Surges for Government Securities

Ghana’s financial landscape is witnessing a significant shift as interest rates have plummeted by 23.7% since January 2025. This downward trend, attributed to improved policy signaling and more stringent expenditure controls, marks a period of notable fiscal adjustment. Despite the reduction in yields, investor confidence in the Government of Ghana’s short-term instruments remains exceptionally high. In a recent Treasury bill auction, the government exceeded its target by a staggering 89.7%, attracting GH¢10.77 billion in bids against a targeted GH¢5.67 billion. Of these bids, the government accepted GH¢6.13 billion, with the 91-day bill emerging as the most sought-after instrument, drawing GH¢5.211 billion in interest.

The decline in rates is reflected across the yield curve, with current figures showing the 91-day bill at 4.82%, the 182-day bill at 6.30%, and the 364-day bill at 9.34%. According to Databank Research, the market is expected to enter a stabilization phase for the remainder of 2025, with rates likely to oscillate within a corridor of 10.40% to 10.90%. This period of relative calm is also being felt in the secondary bond market, which has shown a robust recovery with cumulative turnover reaching GH¢1.07 trillion as of September 2025. This recovery is supported by enhanced fiscal discipline and increased market activity, signaling a return of liquidity to the domestic debt market.

However, analysts warn that this easing cycle may face headwinds as the country moves into 2026. Projections suggest that short-term rates could rise by 50 to 60 basis points in the first quarter of 2026 due to tighter liquidity conditions and increased government issuance. By the second quarter of 2026, market pressures could intensify, potentially pushing 91-day and 182-day bill rates toward the 14% to 18% range as investors reassess fiscal consolidation efforts. These forecasts come amid a significant domestic debt service obligation totaling GH¢131.8 billion between 2026 and 2028, which will require careful management through fresh bond issuances and refinancing strategies.

The long-term stability of Ghana’s yields remains heavily dependent on the successful execution of the ongoing IMF Extended Credit Facility (ECF) program, which is scheduled to conclude in June 2026. Financial experts emphasize that maintaining current gains will require disciplined fiscal management and continued adherence to structural reforms. While the immediate outlook is characterized by high investor demand and falling borrowing costs, the anticipated debt redemptions in 2027 and 2028 underscore the need for a sustainable fiscal trajectory to ensure the bond market remains a viable source of government funding.