The FlowWealth Podcast · Episode 12
What Happens to Ghanaian Investors When Interest Rates Fall?
A conversation about the mechanics of an easing cycle from the perspective of the people it affects most — the millions of Ghanaians holding short-dated Treasury bills who will discover the change only when their money matures.
· 54 min · Hosted by Kwabena Osei-Bonsu
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Illustrative sample. This episode was written to demonstrate FlowWealth’s publication format and is not a published research view. Figures are illustrative and must not be relied upon for any decision.
Guest
Dr. Sedina Ofori-Attah
Pension Fund Chief Investment Officer, Ghanaian pension scheme
Manages a multi-billion cedi pension portfolio with a mandate spanning government securities, listed equities and alternatives. Has managed allocations through two Ghanaian rate cycles and the domestic debt exchange.
Key Takeaways
- Falling rates create reinvestment risk rather than capital loss for short-dated holders, which is why the effect is easy to miss.
- Pension funds match assets to liabilities, which changes how they experience an easing cycle relative to individual savers.
- Deposit rate pass-through in Ghana is slow and incomplete, widening the gap between bank and Treasury returns during easing.
- Liquidity in Ghana's secondary bond market remains the binding constraint on duration strategies for most investors.
- The single most useful habit for individual savers is to compare the real, after-tax return on each option at every maturity.
An easing cycle is usually reported as good news for borrowers. This conversation takes the opposite vantage point: what it means for the far larger group of Ghanaians who are lenders, holding Treasury bills and bank deposits and expecting the returns of the last two years to continue.
The discussion covers why reinvestment risk is so easily missed — nothing shows a loss, the money simply comes back and earns less next time — and why the experience differs so sharply between an individual saver and a pension fund with defined liabilities to match.
The final section is the most practical: what an individual holding short-dated paper should actually do differently, and why the answer is a habit of comparison rather than a prediction about rates.
Chapters
- 0:00Introduction
- 3:00What a rate cut actually does
- 12:00Reinvestment risk, explained plainly
- 23:00Why deposit rates lag
- 33:00How pension funds approach the cycle
- 42:00Secondary market liquidity
- 49:00Advice for individual savers
Topics Discussed
- The mechanics of an easing cycle
- Reinvestment risk explained
- How institutional and individual investors differ
- Secondary market liquidity in Ghana
- Lessons from the domestic debt exchange
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