Ghana records highest interest rate among top four African economies
Ghana has overtaken Egypt, Malawi and Kenya to claim the highest interest rates among the top 15 African countries, according to the Weekly Fixed Income Update compiled by several investment firms.
The rates for Ghana’s 91-day and 182-day treasury bills stood at approximately 24.39% and 26.03%, respectively, marking the highest rates among these prominent African economies.
| COUNTRY | INTEREST RATE (91-DAY BILL) | RANKING |
| Ghana | 24.39% | 1st |
| Egypt | 23.41% | 2nd |
| Malawi | 13.00% | 3rd |
| Kenya | 12.91% | 4th |
While rates experienced a significant decline in March 2023 due to the Domestic Debt Exchange Programme, they have since risen consistently, reaching nearly 30% for the 364-day bill. These rates also position Ghana among the highest globally. However, the 91-day and 182-day bills have witnessed respective declines of 10.97% and 9.95% since March 2023.
Moreover, Ghana’s average lending rates, hovering around 38%, rank the country among the highest on the African continent.
Analysts predict a further increase in interest rates in the upcoming week as the government seeks additional liquidity to finance its projects. This follows competitive yields on the Bank of Ghana’s Open Market Operations bills.
The persistent pace of inflation has led to negative real returns on short-term securities, posing challenges for investors.
It remains uncertain whether the Bank of Ghana will raise its Monetary Policy Rate from the current 29.5% to absorb excess liquidity in circulation and control inflation. Some analysts caution that such a move could impact the real sector of the economy.
In close pursuit of Ghana, Egypt reported a 91-day Treasury bill rate of 23.41%, with the 182-day T-bill standing at 24.02%. Additionally, Egypt has been grappling with rapid depreciation of its currency, the Egyptian Pound, against the U.S. dollar.
Among the top African countries, Seychelles boasts the lowest interest rates at approximately 0.95%, followed by Nigeria at 2.87%.
The high interest rates in Ghana reflect the economic challenges faced by the country, as investors seek compensation for perceived risks. Efforts to manage inflation and stabilize the economy remain crucial to improve Ghana’s interest rate landscape and promote investment.
