Treasury bill yields fall as investors shift to government bonds.

Institutional investors in Ghana are shifting their portfolios toward restructured government bonds as short-term interest rates fall, affecting the returns available in the local debt market.

According to a Business Post report published on October 14, 2026, pension funds, insurance firms, and commercial banks are increasingly interested in bonds issued under the Domestic Debt Exchange Program (DDEP), as well as select benchmark government assets.

The shift comes as short-term Treasury bill yields have plummeted, encouraging investors to reconsider where they can earn higher returns while minimizing risk.

Why are investors shifting their strategies?

According to the study, the yield on Ghana’s 91-day Treasury bill has fallen to roughly 4.6%, while inflation has been reported at around 5.2%.

When an investment’s interest rate is less than inflation, its purchasing power can decrease in real terms. This is one reason institutional investors may seek for stocks with greater yields.

The research also estimates that the yield on chosen restructured government bonds will be around 14%, depending on maturity and market conditions. As a result, these instruments have piqued the interest of investors looking for larger yields than those available on short-term government bonds.

Higher yields, however, may not always translate into higher overall returns. Bond prices fluctuate, and investors must consider maturity dates, liquidity, and the risk of market changes.

DDEP bonds dominated secondary market activity.

According to the research, restructured DDEP bonds are now a primary driver of trading on Ghana’s Fixed Income Market (GFIM), where investors purchase and sell existing debt securities.

Secondary-market trading volume was GH¢337.79 billion in the first nine months of 2026, up 85.6% from the same period in 2025.

The data show that institutional investors are actively altering their holdings as market conditions change. However, increasing trading does not imply that all investors are purchasing the same assets or that every bond is in equal demand.

What this implies for Ghana’s debt market.

The shift emphasizes the significance of returns, liquidity, and confidence in government assets when institutional investors make portfolio decisions.

It also raises concerns about the concentration of investment in government bonds. If pension funds and banks continue to prefer sovereign securities over corporate bonds, businesses may find it more difficult to obtain investment from the domestic bond market.

According to the Business Post analysis, restricted choices and lower liquidity in corporate bonds are among the factors impacting investor behavior.

A larger and more diverse bond market in Ghana might provide firms with new financing choices while also providing institutional investors with a broader range of assets to consider.

For the time being, the trend toward restructured government bonds indicates how investors are reacting to declining short-term yields and shifting market conditions.

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