Ghana is well-positioned to resume issuing local currency bonds as key economic indicators continue to improve, according to Samir Gadio, Head of Africa Strategy at Standard Chartered Plc.

Speaking to Bloomberg, Gadio said a combination of falling inflation, cedi appreciation, and declining borrowing costs has created a supportive environment for re-entering the domestic debt market.

“The conditions seem right to resume local currency bond issuance,” Gadio said. “Cedi gains should support further disinflation and monetary easing, which should facilitate renewed local-currency bond issuance.”

Ghana’s inflation rate has dropped to 18.4%, a significant recovery from the peak of over 54% in 2022. At the same time, the government’s three-month borrowing costs have fallen to 14.7%, down from more than 35% in early 2023.

The Ghanaian cedi has appreciated by 43% year-to-date, strengthening the disinflation trend and fuelling expectations of a policy rate cut in July by the Bank of Ghana — which would be the first in nearly a year.

The optimism is mirrored in investor sentiment. Ghana’s dollar bonds have rallied, with the 2035 Eurobond rising by 0.5% to 76.66 cents on the dollar, and 2029 notes gaining to 93.02 cents as of Monday, June 23, marking a third consecutive day of increases.

These positive trends follow Fitch Ratings’ upgrade of Ghana’s long-term sovereign credit rating from ‘restricted default’ to B- on June 16. The agency cited significant progress in Ghana’s debt restructuring efforts and improved engagement with external creditors.

The anticipated return to the local bond market would mark another milestone in Ghana’s ongoing economic recovery under the IMF-supported reform programme.