Accra: Trading in locally issued US dollar-denominated government bonds surged nearly fifty-fold in the first five months of 2026, with volumes rising to US$35.36 million from US$739,092 during the same period last year according to Ghana Fixed Income Market (GFIM) data.
According to Ghana Web, the 4,684 percent year-on-year increase marks one of the strongest rebounds in any segment of the domestic fixed-income market since the 2023 Domestic Debt Exchange Programme (DDEP) and is being interpreted by market participants as a sign of improving investor confidence in Ghana's sovereign debt outlook. In May alone, trading volume reached US$10.27 million, up from US$570,126 in May 2025, representing a 1,701 percent increase.
The figures, published in Ghana Stock Exchange's monthly fixed-income market report, relate to two outstanding US dollar-denominated government bonds - a four-year instrument and a five-year instrument - with a combined outstanding stock of US$791.77 million. The volume traded between January and May implies a turnover rate of approximately 4.5 percent of outstanding stock, a level that would have been difficult to envisage at the height of post-DDEP market dislocation.
The surge is unfolding against a broader GFIM recovery. Total traded value for the first five months of 2026 reached GHS160.7 billion, more than double the GHS79.61 billion recorded for the same period last year, driven in part by sharp yield compression across the curve. The four-year government bond yield stood at 10.27 percent in April 2026 compared with 21.21 percent a year earlier, indicating a repricing that is forcing portfolio reallocation.
The DDEP, which was primarily a Ghana cedi restructuring, effectively paralysed secondary market activity across much of the domestic bond market. The local dollar bonds, largely outside the restructuring's scope, offer investors protection from cedi depreciation while retaining exposure to sovereign credit. Odoom describes the surge as the early emergence of a market rather than a recovery in an established one.
The identities of investors behind the surge are not fully disclosed, although trading records point to a mix of commercial banks and broker-dealers, with Black Star Brokerage dominating activity for the January-to-May period. The prominence of broker-dealers is notable, indicating genuine end-investor demand rather than interbank balance-sheet repositioning.
This resurgence coincides with a broader improvement in the domestic macroeconomic environment. Inflation was reported at 3.7 percent in May 2026, reserves cover nearly six months of imports, and the cedi has broadly stabilised. Ghana exited the IMF Extended Credit Facility in May 2026 and will continue under a non-financing Policy Coordination Instrument.
However, market participants caution that liquidity remains shallow. The segment consists of only two outstanding instruments with a combined value of US$791.77 million, and the US$10.27 million traded in May was executed through just ten transactions. Structural constraints, such as the requirement for investments to be funded with existing eligible foreign currency balances, narrow the eligible investor base.
Thin secondary liquidity and the lack of multiple active market-makers mean trading in the dollar bonds remains episodic. Neither the Bank of Ghana nor the Ministry of Finance has publicly indicated whether additional local dollar-denominated bonds will be issued.
Odoom points out that while the economy has seen positive developments, the capital market has not yet caught up with these changes. The gap between the size of captive institutional money and the diversity of instruments available remains a defining structural problem in the market.