Bond market bounces back strongly as trades hit GH₵174bn
Ghana’s bond market posted an impressive recovery in 2024, with annual trade volumes on the Ghana Fixed Income Market (GFIM) reaching GHS174 billion, according to the 2024 Financial Stability Review.
This represented a 76.8 percent increase compared to the GHS98.4 billion recorded in 2023, signalling renewed investor activity and growing confidence in the domestic debt market.
The rebound was most evident in the first quarter of 2024, when trade volumes surged to GHS40.7 billion.
This marked a 64 percent increase from the GHS24.8 billion traded in the same quarter of 2023. Momentum remained strong throughout the year, culminating in a particularly robust performance in the final quarter.
The fourth quarter alone recorded trades worth GHS55.24 billion, representing a 41 percent year-on-year increase and making a significant contribution to the cumulative annual total.
Analysts attribute the surge to improved macroeconomic conditions, fiscal consolidation efforts, and the gradual restoration of investor confidence following Ghana’s debt restructuring programme.
The increased activity in the domestic bond market is seen as a sign that both institutional and retail investors are beginning to re-engage with fixed income securities after a period of uncertainty.
However, the strong domestic performance contrasted with muted foreign investor participation. Non-resident holdings of outstanding debt securities fell to 4.1 percent in 2024.
This was significantly lower than the 2022 average of 14.4 percent and the 2023 average of 8.6 percent, highlighting lingering concerns among offshore investors about Ghana’s debt sustainability and currency risks.
Market watchers note that while the surge in domestic activity is encouraging, a deeper and more balanced bond market will require the return of significant foreign participation. Foreign investors typically provide additional liquidity, diversify the investor base, and help benchmark yields more efficiently.
Despite the subdued role of non-residents, the GFIM’s strong 2024 performance underscores the resilience of Ghana’s capital market and its capacity to attract domestic capital flows.
The gains also reflect the continued development of market infrastructure, which has facilitated transparency and efficiency in bond trading.
Looking ahead, analysts believe sustaining the momentum will depend on the government’s ability to maintain fiscal discipline, deepen investor confidence, and create conditions conducive to the return of foreign investors.
