Despite Ghana’s increasing reliance on domestic borrowing, investors continue to show confidence in government debt instruments, according to University of Cape Coast finance lecturer Seyram Kawor.
Kawor said investors have maintained their appetite for Treasury bills even though returns have fallen sharply from previous levels.
He noted that one-year rates could previously reach about 24% to 30%, compared with around 9% to 11% currently.
“Investors still have confidence in the government and they are borrowing to the government. That tells us that investors have good appetite for investment,” he said on Joy Prime.
He attributed the confidence partly to government’s continued honouring of its debt obligations under the Domestic Debt Exchange Programme.
Kawor also pointed to pension funds and private equity funds as sources of funds looking for investment opportunities.
He said Treasury bills remain an attractive option because they were not affected by the Domestic Debt Exchange Programme.
“People felt they are safe in investing with government anytime there is the need,” he said.
According to Kawor, the positive economic signals and support from development partners have also helped sustain investor confidence.
He said government must maintain that confidence by continuing to manage the economy well and avoiding actions that could weaken the goodwill it currently enjoys.
