Policy Watch

Ghana Monetary Policy Statement


The Bank of Ghana has decided to keep its key rate unchanged at 26%.

Ghana Monetary Policy Statement


The Bank of Ghana has decided to keep its key rate unchanged at 26%

Ghana Monetary Policy Statement


The Bank of Ghana has decided to keep its key rate unchanged at 26%.

Ghana Monetary Policy Statement


The Bank of ghana has decided to increase its key rate to 26% from 25%.

Debt vs GDP / Bonds vs bills

All Data - Ghana

Year 2012 2013 2014 2015 2016 2017
GDP (billions US$) 41.94 48.59 33.45 - - -
Total Outstanding Amount (Billion US$) 9.53 10.83 - - - -
Bonds 6.37 7.17 - - - -
Bills 3.16 3.67 - - - -
Outstanding Amount/GDP (%) 22.72% 22.30% 0.00% - - -

Country Summary

Ghana’s economy has maintained commendable growth trajectory with an average annual growth of about 6.0% over the past six years. In 2013 growth decelerated to 4.4%, considerably lower than the growth of 7.9% achieved in 2012. Growth has, however, been broad-based, driven largely by service-oriented sectors and industry, which on average have been growing at a rate of 9.0% over the five years up to 2013. Over the medium term to 2015, the economy is expected to register robust growth of around 8%, bolstered by improved oil and gas production, increased private-sector investment, improved public infrastructure development and sustained political stability.

The continued widening of the budget deficit has been a major constraint to fiscal and debt sustainability. Following an expenditure overrun in 2012, marked by an unprecedented budget deficit of around 12% of GDP, the situation persisted in 2013, with about the same level of budget deficit. Revenue enhancing and expenditure consolidation measures underway in 2014 are expected to ease the fiscal deficit to 9%. In conjunction with fiscal constraints, inflation has been on the rise resulting from a number of factors including the removal of subsidies on petroleum prices and a gradual rise in electricity and water tariffs. It is also worth noting the rise in public debt from 43% of GDP in 2011 to 48% in 2012, and further to 53.5% in September 2013, resulting from a widened budget deficit. The external sector will continue to experience a widened current account deficit of around 12% of GDP in 2014, exacerbated by a decline in commodity prices of major export commodities, particularly on gold and cocoa.

With the exception of some food processing and significant exports of gold and unprocessed cocoa, Ghana is relatively less integrated into global value chains due to its infant industry. Yet, compared to its regional peers, Ghana has the industrial capabilities to export and drive regional value chains in Economic Community of West African States (ECOWAS) countries. Ghana’s geographical proximity to ECOWAS markets, projected rise in consumption and lower standard requirements offer Ghanaian industrial firms opportunities to scale up and increase their productivity. For the industrial sector to grow, authorities need to tackle the constraints relating to the cost of credit and to the unreliable supply of energy, in order for leading industrial sectors in construction materials, textile, agro-processing, plastics and pharmaceuticals to expand. Non tariff barriers also add a significant burden to the development of these regional value chains.

Financing opportunities on the local market are limited due to the high interest rates on bank loans, which are generally higher than 25%. There are 26 commercial banks in Ghana, which are relatively small in terms of balance sheets size.

The Ghana Stock Exchange (GSE) has 36 listed companies, 3 government bonds and 1 corporate bond.

Ghana has made some progress in its debt management skills, following the reorganization of the Debt Management Division of the Ministry of Finance with functional units specialized by functional areas for deepening debt management skills and policies. 

The share of domestic debt to total public debt has drastically shifted from foreign to domestic market. The rising level of domestic debt has however, became detrimental to public finances in view of increased reliance on short term borrowing. With Treasury bills and notes (91 day - 1 year) accounting for around 60% total domestic borrowing, interest payment on domestic debt has become a major public expenditure category, accounting for over 80% of total interest payment.

In 2007 the GoG issued a debut 10-year Eurobond of $750 million. In 2013, a second 10-year Eurobond of $1,000 million was issued. It was twice  oversubscribed. In addition to the $1,000 million raised, GoG used $250 million to buy-back the first Eurobond.

Bank of Ghana (BoG) is in charge of public debt according to the terms and conditions agreed with the Government. The BoG is the advisor to the government on tax issues. The BoG advises the government on monetary transactions of the government and its agencies on the local and international contracts.

Source: African Economic Outlook

Monetary policy & Public debt

The Bank of Ghana  (BoG) is in charge of the monetary policy and the debt management.

The "Bank of Ghana Law Act", adopted in 2002, describes the responsibilities of the Central Bank of Ghana.

Following this law a monetary policy committee was put in place. This committee's mission is to formulate and implement necessary monetary policy instruments. The main objective of monetary policy is ensuring price stability conducive to a balanced and stable economic growth, as well as promoting and ensuring monetary stability. The Committee sets interest rates, as it deems consistent with the inflation and growth targets. Inflation targets are annual and are set jointly by the Bank of Ghana and the Ministry of Finance.

The monetary policy committee is composed of seven members (the Governor of the Bank, two governor’s deputies, the director of the research department of the Bank, the Director of Banking of the Bank, and two external members appointed by the Minister of Finance). The monetary policy committee meets six times per year. The decisions taken at these meetings are made available to the public via a press release available on Bank of Ghana website.

BoG is in charge of public debt according to the terms and conditions agreed between it and the Government. The Bank is the advisor to the government on tax issues. The Ghanaian debt management policy has been set up to address the financing needs of the government. These funds are used to manage public debt at appropriate levels on the medium and long term. To achieve this goal, Ghana must find funding at the lowest cost and risk levels. This policy also seeks to develop capital markets in Ghana, but also access to international capital markets.

Since 2008, another major component of this policy is the extension of the maturity of the debt stock. The extension of the term of the debt is essential, because only long-term debt attracts foreign investors, which helps diversify the investor base.

Market Structure

Instruments issued & Market participants

Instruments issued

Treasury-Bills (T-Bills): Maturities available are 91 days, 182 days and 364 days.

Treasury-Bonds (T-Bonds): Maturities available are 2y, 3y, 5y and 7 years.

At end of 2012, the T-Bonds represented 62% (GH 9 544 millions) of the total domestic debt stock. The 3-year maturity represented 52% of the T-bonds stock.

Market participants

Government of Ghana (GoG) is the main issuer of T-Bills and T-Bonds. GoG issues T-Bills every week basically for fiscal management of the economy. The T-Bonds are issued occasionally.

Bank of Ghana (BoG) issued T-Bills for monetary policy management purposes.

The Ghana Cocoa Board issues securities for the purchase of cocoa during the cocoa season. The mission of the Board is to encourage and facilitate the production, processing and marketing of good quality cocoa, coffee and shea nut in all forms in the most efficient and cost effective manner, and maintain the best industrial relations.

In 2012, GoG issuances represented 75,6% of the total instruments issued (GH 26,73 billion), following by the Ghana Cocoa Board with 14,39% and the BoG with 9,26%.

The Primary Dealers are Banks, Discount Houses and Brokerage firms licensed by the Bank of Ghana to take part in the Primary Auction of Government of Ghana and Bank of Ghana Securities.

Commercial Banks hold 34% of the outstanding securities as of June 2013. This is followed by foreign investors with 32,5%, and firms and institutions with 12,8%.

Primary & Secondary Market

Primary Market

The value of all securities issued through the auction system in 2012 increased by 58.58% from GH 16,857,878,287 in 2011 to GH 26,733,829,218. Bids submitted for the year exceeded both the targeted amount and issued amount by about 21%. 

The T-Bonds issued in 2012 represented 18,43% of the total issued amount. The 3-year bonds represented 45% of the bonds issued in 2012. The short-term instruments represented more than 80% of the total instruments issued. The 91 days T-Bills lead the short-term issuances encompassing 47% of the total instruments issued. 

In 2012, the bonds issued started with a monthly average coupon rate of 11.81% in January and ended with an average coupon rate of 22.96% at the end of the year. The general average coupon rate on all the notes and bonds issued for the 2012 was 19.17%.

Secondary Market

The volume of trade reported by participants improved tremendously in 2012 in comparison with 2011. For 2012 a total of 40,216 transactions in the secondary market were reported into the Depository System representing 239.12% improvement over the 11,859 in 2011. 

As of the end of 2012, the face value and settlement amount of the reported transactions in the secondary market increased by 257.84% and 239.74% to GH 13,355,503,368 and GH 13,042,487,104 respectively.

The 3-year Bond continues to be the most liquid security accounting for more than 50% of the secondary market transactions in 2012. 

Clearing, Settlement & Custody

Bank of Ghana created the Central Securities Deposit (CSD), a computerized registration system to record the data on holdings of all securities (government bonds, equities, private debt). The CSD operates as a bank for all securities or securities transactions (debit / credit). The CSD is linked to institutions that sell government securities. CSD allows for the conversion of physical shares into an equivalent number of securities in electronic form and credited to the account of the investor through its custodian.

THE CSD can therefore proceed with the clearing and settlement of book-entry debt securities.

THE CSD allows complete elimination of risk of loss or theft of securities. The central depository also facilitates the process of delivery against payment (DvP); it makes fewer errors and delays associated with manual paper bringing efficiency to the clearing and settlement process. 

Protection of investors

Two laws govern the security of the financial industry in Ghana:

  • Securities Industry Law, PNDC Law 333
  • Securities Industry Amendment Act, Act 590

The Securities Industry Law led to the creation of the Securities and Exchange Commission (SEC). The SEC is the main body for the regulation and supervision of financial market operations in Ghana. The responsibilities of the SEC include:

  • Providing businesses and consumers advice to interpret the provisions of laws, rules and regulations on the subject of trading securities and the submission of investor complaints;
  • Licensing and regulation of all market participants such as investment advisers, brokers and their representatives, as well as the regulation of the Ghana Stock Exchange;
  • Supervising and regulating the fund management industry in Ghana and administration of securities legislation concerning collective investment trusts such as mutual funds;
  • Overseeing the disclosure of material information to investors by companies, including securities listed on the Ghana Stock Exchange;
  • Conducting audits on the use of funds raised by public subscription;
  • Investigating violations of the securities laws and the Companies Code and overseeing mergers and acquisitions.

Guide to Buying Bonds

Procedures for market participation

Every Friday, the Bank of Ghana conducts an auction of T-bills on behalf of the Government and the public sector for their borrowing needs as well as for monetary policy purposes. T-Bond auctions are conducted occasionally. The auction is processed electronically using either the cut off rate or the amount government is borrowing. Following the set criteria the system automatically allots the winning bids and the cost of these bids, which become available online to participants. The announcement of the next issue as well as the amounts and instruments issued are disclosed in the publication of the results of the previous issue. Only primary dealers may participate in auctions.

On the secondary market, government bonds with a maturity of less than 2 years are traded over the counter through the primary dealers. In 2006, the 2 year and 3 year maturity bonds were quoted on the Ghana Stock Exchange (GSE). The 5-year maturity bonds were authorized for listing on the GSE in 2007.

The GSE opens on weekdays from 9:30am to 3pm. The trading system used is an electronic platform, the GSE Automated Trading System (GATS). Orders are processed on the GATS as well as from the floor, with brokers or even over a secured Internet link.

An investor cannot intervene directly in the stock market to buy government securities; they must use a broker. For foreign investors, there are 18 brokers following established procedures to cater to foreign investors. Barclays Bank of Ghana Ltd and Stanbic Bank of Ghana Ltd provide foreign investors with access to the secondary market. 

Settlement cycle

On the primary market, when the allotment process is complete, each successful participant is advised of the amount to be paid to the Government on settlement day. The settlement cycle for government securities auctions therefore occurs on the basis of T+1. On the settlement date, the fund accounts of the participants are debited by their respective amounts and the securities accounts of individual investors are credited with the allotted securities. Auctions for Government Securities are held on Friday (T) and subsequently settled on Monday.

In the secondary market, DvP process is in place in Ghana for Government Securities Settlement. Securities are settled trade for trade and credited or debited directly to the account of the investor whereas funds are settled by a single transfer into the account of the participant at the Bank of Ghana. Settlement is done at the end of the settlement day. The settlement cycle for government securities market is currently T+0.


There is a withholding tax of 8% (which is also the final tax on dividend income) for all investors, residents and non-residents. Since 2010, capital gains on listed securities are exempt from tax.


Rating AgencyCurrent ratingOutlook
Standard and Poor’sB+Stable

Primary dealers

Initially, brokerage firms, banks and discount houses were the main distributors. The participation of retail banks seemed essential given their extensive networks to promote the retail government securities.

However, in March 1996, in consultation with the distributors on the market, the Bank of Ghana stopped the retail market for Treasury bills. Instead they focused on the establishment of the wholesale auction with the help of Primary dealers. The primary market could be stimulated and expanded thanks to increased competition on a more efficient and dynamic secondary market.

Market Restrictions

Openness to international investors

Attracting foreign investment is a big challenge for the Government of Ghana. The Government passed laws to encourage foreign investment and replaced regulations perceived as unfriendly to investors. The Foreign Exchange Act 2006 (Act 723) has allowed non-resident investors to invest in the Ghanaian capital markets.

Capital controls

There is no limit on capital transfers as long as the transferee can identify the source of capital.

Restrictions on FX and profit repatriation

Ghana operates a free-floating exchange rate regime. Ghana's local currency, the Ghana cedi, can be exchanged for Dollars and major European currencies. The Foreign Exchange Act 2006 (Act 723) has allowed non-resident investors to invest in the Ghanaian capital markets without limits or exchange controls.

Non-resident investors can repatriate their original investment plus all gains and revenues without restriction.

Documents & Resources

Documents - Ministry of Finance

Documents - Central Bank