Bond Market Reopening Offers Investment Opportunities — Business Coach
By: Solomon Nartey Tetteh
Chartered Accountant and Business Coach, Dickson Assan says the reopening of Ghana’s bond market presents a significant opportunity for investors seeking better returns and diversified investment options.
The development follows a recent announcement by Ghana’s Finance Minister indicating that restrictions placed on the domestic bond market in 2023, at the height of the country’s debt crisis, have now expired. The restrictions were introduced as part of Ghana’s debt restructuring programme under the Domestic Debt Exchange Programme.
Speaking on Business Breakfast on Zed, Mr. Assan noted that investment opportunities in recent years have largely been limited to treasury bills following restrictions on the issuance of new bonds.
According to him, treasury bill rates have been declining, leaving investors with limited returns.
He explained that the 91-day Treasury bill currently yields about 3 percent, which reduces the range of attractive investment options available to investors.
Mr. Assan said the return of the bond market will allow investors to diversify their portfolios and manage risk more effectively.
He added that having a variety of investment instruments is essential for sound financial planning and risk management.
Mr. Assan also pointed to improvements in Ghana’s macroeconomic indicators, noting that recent figures suggest some level of economic stability.
He cited the latest Consumer Price Inflation, which stood at 3.3 percent, as a sign of progress.
According to him, if a bond yields about 7 percent, investors could earn a real return of roughly 4 percent after adjusting for inflation.
Mr. Assan noted that since many bonds involve large investment amounts, the returns could be significant over time for investors with substantial capital.
He further explained that the reopening of the bond market will also give government additional avenues to finance its budget deficit.
According to him, the government recorded a deficit of about GH¢1.9 billion last year and requires sustainable funding sources to address fiscal obligations and infrastructure needs.
Mr. Assan expressed optimism that the renewed access to the bond market could support government financing while also benefiting investors.
However, he cautioned that stakeholders would be closely watching developments to ensure that the challenges experienced during Ghana’s Domestic Debt Exchange Programme in 2022 are not repeated.
