Ghana has retained its position with the highest interest rates in Africa for 2023, even as there was a decrease in Treasury bill yields, according to a Fixed Income Update from various investment firms.
The rates for the 91-day and 182-day treasury bills stood at about 29.24% and 31.88%, respectively, maintaining their high levels despite a 6.12% and 4.10% decline in yields for the 91-day and 182-day bills in 2023.
The persistently high rates pose a challenge to the government, increasing the cost of borrowing on the domestic market.
Despite a significant drop in rates in March 2023 due to the Domestic Debt Exchange Programme, the decrease in yields was short-lived. Ghana's average lending rates are currently around 32%, ranking the country among the highest on the African continent.
Analysts express optimism that treasury yields might experience a decline in 2024, especially if investor sentiments improve.
However, they caution that election-related fiscal risks and their impact on inflation could pose a threat to the yield outlook.
Ghana is closely followed by Egypt, which has the second-highest interest rates in Africa (91-day bill: 25.68%, 182-day bill: 25.95%).
In contrast, Cape Verde and Seychelles have recorded the lowest interest rates on the continent.
