Accra:Institutional investors are increasingly turning to restructured Domestic Debt Exchange Programme (DDEP) bonds as falling Treasury bill yields reduce returns on short-term government securities and encourage portfolio realignment. The shift is reshaping trading patterns on the primary market and the Ghana Fixed Income Market (GFIM), with pension funds, insurance companies, and commercial banks favoring longer-dated government debt offering stronger inflation-adjusted returns.
According to Ghana Web, the 91-day Treasury bill yield has fallen to about 4.69 percent from more than 10.3 percent a year earlier, while the 364-day bill yields approximately 9.98 percent. With inflation hovering around 5.2 percent, investors holding shorter-term bills face negative real returns, prompting a search for more attractive investment opportunities.
Although abundant liquidity supported repeated oversubscriptions at Treasury bill auctions earlier in 2026, the aggressive monetary easing cycle has weakened demand for some short-term instruments, with primary auctions increasingly experiencing undersubscriptions. The 364-day bill has nevertheless emerged as the preferred option among the three main Treasury bill tenors, offering investors a real return of approximately 4.7 percent while allowing them to lock in yields for longer.
However, the strongest institutional appetite has shifted towards restructured DDEP bonds, which offer significantly higher yields on the secondary market. Trading yields range from about 13.86 percent for February 2029 maturities to 14.93 percent for February 2037 bonds. The February 2030 and February 2032 bonds yield approximately 14.20 percent and 14.51 percent, respectively. These returns have helped make the restructured securities central to secondary market activity.
Total GFIM trading volume reached GHS337.79 billion in the first nine months of 2026, representing an 85.6 percent increase over the corresponding period in 2025 and exceeding every full-year total since the market began operations in 2015. DDEP bonds account for an estimated 50 to 65 percent of daily market turnover, with individual trading sessions sometimes recording more than GHS1.3 billion in transactions.
Improved confidence in government debt servicing has also supported demand. The Ministry of Finance's operationalisation of dedicated sinking funds, with monthly allocations equivalent to seven percent of gross domestic non-oil tax revenue, is intended to help meet approximately GHS111 billion in maturities falling due in 2027 and 2028.
Meanwhile, limited investment alternatives are reinforcing the trend. Corporate bonds account for less than 0.1 percent of daily GFIM turnover, despite some instruments carrying coupons between 21.55 and 30.39 percent. Similarly, certain legacy government bonds, ESLA notes, and Daakye PLC education infrastructure bonds offer yields exceeding 20 percent but have attracted comparatively limited institutional interest. Newly issued four-year government bonds trade at around 11.41 percent, below the returns available on restructured securities.
The concentration of trading in sovereign debt highlights investors' preference for liquid government instruments as they balance capital preservation, marketability, and returns in Ghana's evolving fixed-income market.