Government targets lower borrowing costs with 12–12.5% bond guidance

The government has set an initial pricing guidance of 12 to 12.5 per cent for its new seven-year cedi-denominated bond, signalling a potential decline in borrowing costs as it returns to the domestic debt market.

The range, announced in a market update following the launch of the bond, will guide investor expectations ahead of the final rate determination, which is expected after the book-building process closes on April 1.

The move marks Ghana’s first issuance of a bond of this tenor since 2022, following the disruption of the domestic market by the Domestic Debt Exchange Programme introduced in 2023.

Market analysts say the pricing guidance points to improving macroeconomic conditions, noting that existing seven-year bonds on the secondary market are currently trading between 13 and 14 per cent. The lower range being proposed suggests renewed investor confidence and easing risk perceptions.

The book-building process for the bond is now open, with the Finance Ministry indicating that updates, including any revisions to pricing, will depend on investor demand. Settlement is scheduled for April 7.

Investors are also watching closely for the size of the issuance, which has not yet been disclosed, as government seeks to re-establish a consistent domestic borrowing programme.

According to the issuance terms, the bond is open to both resident and non-resident investors, with a minimum bid of GH¢50,000, widening access beyond traditional institutional players.

Proceeds from the bond will be used to finance projects outlined in the 2026 budget, while also supporting liquidity management and refinancing of maturing debt obligations.

Authorities say the issuance is part of a broader strategy to rebuild Ghana’s sovereign yield curve, expand investment options in the domestic market and restore confidence among investors following recent debt restructuring efforts.