Ghana’s bond market could attract renewed investor interest following Moody’s Ratings’ upgrade of the country’s sovereign credit rating from Caa1 to B3, as improving perceptions of creditworthiness create fresh opportunities across the fixed-income market, according to an exclusive interview with Isaac Kwasi Mensah, a Financial Analyst and Portfolio Manager at SIC Financial Services Limited.
The market has already recorded a notable increase in trading activity, with secondary-market turnover rising by 47.55% week-on-week to GH¢4.07 billion. The performance points to renewed activity among investors trading existing government securities, although the distribution of transactions suggests that investors remain selective about the maturities they are willing to hold.
In an interview with The Vaultz News, Mr Mensah explains how the rating upgrade could influence investor confidence, why shorter-dated bonds continue to attract significant trading interest, and what the evolving credit outlook could mean for Ghana’s government securities market.
Moody’s Upgrade Could Strengthen Investor Confidence
Ghana’s sovereign credit rating upgrade from Caa1 to B3 represents an improvement in the country’s assessed credit standing. While the new rating remains within speculative-grade territory, the change could influence how investors evaluate Ghana’s sovereign debt and the risks associated with holding government securities.
Mr Mensah argues that the upgrade could provide an important boost to market sentiment, particularly among investors who have remained cautious about Ghana’s debt outlook.
“The rating upgrade is an important development for the bond market because investor decisions are heavily influenced by how sovereign risk is perceived. When a country receives a better credit rating, it can encourage investors to reassess the risks attached to its securities and consider increasing their exposure.
“However, the upgrade should not be interpreted as an automatic signal that every government bond will experience a price increase. Investors will still examine yields, maturity profiles, liquidity conditions and the sustainability of Ghana’s economic recovery before making their decisions.”
Isaac Kwasi Mensah
He explained that the distinction between improving sentiment and actual investment performance remains important. A stronger credit assessment can support demand, but bond prices will also depend on market yields, inflation expectations, monetary policy and the government’s financing requirements.
For existing fixed-rate bonds, stronger demand can push prices higher and yields lower, provided other market conditions remain unchanged.
GH¢4.07 Billion Turnover Signals Stronger Market Activity
The secondary bond market recorded GH¢4.07 billion in turnover during the reporting period, representing a 47.55% increase from the previous week.
The rise indicates a significant pickup in trading activity, although turnover alone does not establish whether investors are accumulating bonds or repositioning their portfolios.
Mr Mensah, meanwhile, interprets the increase as a development worth watching as investors respond to changing expectations about Ghana’s creditworthiness.
“A 47.55% increase in turnover is significant because it shows that investors are actively trading government securities. The next question is what is driving that activity and whether the increase will translate into sustained demand.
“If the improvement in Ghana’s credit outlook encourages investors to buy existing bonds, we could see stronger demand supporting prices across selected maturities. But we need to distinguish between increased trading and net buying. High turnover can reflect both purchases and sales, so the direction of the market will depend on the balance between demand and supply.”
Isaac Kwasi Mensah
The observation highlights an important consideration for market participants. Rising turnover can reflect renewed confidence, portfolio adjustments or investors taking advantage of price movements. Further evidence from bond prices, yields and transaction patterns would help establish whether the market is entering a sustained buying phase.
Short-to-Medium-Term Bonds Remain Investors’ Preferred Segment
Trading activity remained concentrated in the short-to-medium end of the yield curve, with bonds maturing between 2027 and 2030 accounting for 63.68% of total turnover at an average yield of 12.43%.
Securities in the 2031 to 2034 maturity segment accounted for 34.69% of turnover, recording an average yield of 14.05%. Bonds maturing after 2035 represented just 1.63% of turnover, with an average yield of 14.84%.
The distribution suggests that trading was heavily concentrated in bonds with nearer maturities, while longer-dated securities attracted a substantially smaller share of transactions.
Mr Mensah links this pattern to the way investors balance returns against uncertainty.
“The concentration in the 2027 to 2030 maturities suggests that investors are paying close attention to the relationship between yield, maturity and risk. Shorter-dated securities can offer greater visibility over the investment horizon, particularly when investors are still assessing the durability of an improving credit outlook.
“Longer-dated bonds may offer higher yields, but they also expose investors to greater interest-rate risk over time. If market yields rise, the prices of existing long-term bonds generally experience larger declines than those of comparable shorter-term securities.”
Isaac Kwasi Mensah
The average yields recorded across the maturity segments also demonstrate that investors are demanding different returns depending on the tenor of the securities.
Although longer maturities offered higher average yields during the reporting period, those returns should be assessed alongside the potential for price fluctuations and the investor’s investment horizon.
September 2030 Bond Draws Attention
The September 2030 bond recorded GH¢45.85 million in turnover at a weighted-average yield of 11.94%, making it a notable security within the market’s trading activity.
Its yield was below the reported average of 12.43% for the broader 2027 to 2030 maturity segment. However, differences in individual bond characteristics, coupon structures and trading prices mean that comparisons should be interpreted carefully.
Mr. Mensah suggests that securities approaching their maturity dates could remain attractive to investors seeking to manage duration exposure while maintaining returns.
“The September 2030 bond is worth monitoring because it provides an example of activity within the short-to-medium-term segment. Investors may find bonds in this maturity range useful when positioning their portfolios for a period of improving credit sentiment but continuing uncertainty. Nevertheless, the yield should not be considered in isolation. Investors need to examine the purchase price, remaining cash flows, liquidity and their own investment objectives before deciding whether a particular bond offers value.”
Isaac Kwasi Mensah
Will the Buying Momentum Last?
The key question is whether the rating upgrade will translate into sustained demand for Ghanaian government securities.
A more favourable credit assessment could encourage investors to revisit bonds that had previously been considered too risky. However, continued demand will depend on whether Ghana can maintain fiscal discipline, strengthen debt sustainability and preserve macroeconomic stability.
Interest-rate movements will also matter. If market yields decline, existing fixed-rate bonds could appreciate in value. Conversely, a rise in yields could weigh on prices even if investor perceptions of sovereign credit risk improve.
Mr Mensah in his assessment, noted that the near-term outlook is encouraging but not without conditions.
“The bond market has reasons to remain constructive in the near term, particularly following the improvement in Ghana’s sovereign credit rating. However, a lasting recovery will require more than a rating announcement. Investors will want to see consistent progress in fiscal management, debt sustainability and economic stability. If those improvements continue, the market could experience stronger demand for selected government securities. The opportunity is there, but investment decisions must remain grounded in valuations, yields and the risks attached to each maturity.”
Isaac Kwasi Mensah
For investors, the immediate task is to distinguish between a short-lived reaction to improved sentiment and a more durable shift in demand. The 47.55% increase in turnover provides evidence of stronger trading activity, while the concentration in shorter maturities shows that market participants continue to make selective decisions.
Ghana’s B3 rating may therefore become an important factor in shaping bond-market sentiment in the coming weeks. Whether that translates into sustained price gains will depend on the strength of investor demand and the country’s ability to reinforce confidence in its economic and fiscal outlook.
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