BY Nadia Ntiamoh
The Government of Ghana has once again fallen short of its treasury bills (T-bills) target, marking the seventh consecutive week of undersubscription as investors continue to demand higher interest rates.
According to the latest auction results released by the Bank of Ghana, the government missed its target by roughly 10 percent—an increase from the previous week’s shortfall highlighting growing investor caution toward short-term government securities.
Auction Performance Falls Below Target
The government aimed to raise about GH¢4.89 billion but received bids totaling approximately GH¢4.48 billion. Out of this, it accepted around GH¢4.43 billion, signaling both weaker demand and selective acceptance of bids.
A breakdown of the auction shows:
91-day bill: GH¢1.89 billion tendered, GH¢1.88 billion accepted
182-day bill: GH¢764.25 million tendered, GH¢764.24 million accepted
364-day bill: About GH¢1.82 billion tendered, GH¢1.78 billion accepted
The 91-day instrument remained the most attractive to investors, accounting for over 42 percent of total bids.
Interest Rates Edge Up
Despite weaker demand, yields continued to rise—particularly on longer-dated instruments—reflecting investor expectations for better returns amid economic uncertainty.
91-day bill: Held steady at 4.92%
182-day bill: Increased slightly to 6.97% (from 6.96%)
364-day bill: Rose to 10.19%, up by 7 basis points
The upward movement at the longer end of the yield curve suggests investors are pricing in higher risk or inflation expectations over time.
Growing Investor Pressure
The persistent undersubscription points to a broader shift in investor sentiment. Market participants appear increasingly reluctant to commit funds at current rates, preferring higher yields before investing in government securities.
Analysts say this trend could complicate short-term borrowing for the government, especially if the pattern continues, potentially forcing authorities to either: Offer more attractive rates to entice investors, and Explore alternative funding sources.
Implications For Government Financing
The continued weak uptake of T-bills raises concerns about the government’s ability to meet its short-term financing needs efficiently. If undersubscription persists, borrowing costs could rise further, placing additional pressure on fiscal management.
