The secondary bond market in Ghana showed improvement in the first half of 2024 compared to the same period in the previous year, although it remains below the levels seen before the Domestic Debt Exchange Programme (DDEP), according to Databank research.
Despite this progress, investors continue to focus primarily on the money market.
Trading results indicate that market activity for Government of Ghana securities has increased, driven in part by growing participation from offshore investors.
The market has also benefited from significant improvements and transparency in sell-buyback trades, contributing to the overall turnover of GH¢19.18 billion.
Looking ahead, the completion of external debt restructuring could provide a further boost to the Ghanaian secondary bond market. Ghana’s debt restructuring has been largely influenced by conditions set by the International Monetary Fund (IMF), as the country grappled with unsustainable debt levels while seeking a US$3 billion bailout from the Fund.
Databank Research suggests that a successful restructuring of external debts could offer the government additional fiscal flexibility, allowing it to prioritize economic growth while meeting other commitments under the IMF program.
Furthermore, a positive outcome in restructuring external debts, coupled with the already completed DDEP, may help reset investor confidence in Government of Ghana securities, as concerns about debt sustainability are alleviated.
These factors are expected to have a favorable impact on trading activity in the secondary bond market, particularly in light of declining Treasury bill yields.