Banks holding in Ghana’s domestic debt grew significantly by a little above GH¢7 billion to GH¢38.1 billion in the third quarter of last year, representing 28.2 percent, data from the Bank of Ghana (BoG) has revealed.
This is compared to GH¢30.1 billion, about 29.8 percent of their holdings recorded in similar period of 2019.
According to the report the rising appetite for government bonds and Treasury bills by the banks was due to the increasing share of its domestic debt component.
Non-Resident investors the report said held GH¢25.5 billion of Ghana’s total domestic debt at the end of September 2020. This represented 18.9 percent of the entire domestic debt.
This is compared to about GH¢25.6 billion in the corresponding period of 2019, representing 26.2 percent of the share of domestic debt.
There had been fears that a rising share of foreign investments in the country’s domestic debt may not be a good idea, particularly in situations of global economic uncertainties.
The non-resident investors could easily liquidate their funds and that could put pressure on the cedi.
Importantly, the Bank of Ghana’s holding of domestic debt at the end of the third quarter of last year stood at GH¢31.2 billion. This represented 23.1 percent of the total domestic debt.
SSNIT’s holding was however about GH¢395 million, about 0.3 percent of total domestic debt.
Insurance companies and ‘Other’ holders comprising of rural banks, firms and institutions as well as individuals held GH¢740.7 million (0.5 percent), and GH¢39,102.3 million (28.9 percent) of the domestic debt in September 2019
Ghana’s total domestic debt stood at GH¢286 billion at the end of November last year.
The domestic component was however GH¢147 billion, a little higher than the external debt component.