- Government Misses T-bill Target as Investor Demand Skews Toward Shorter Maturities
The Government of Ghana fell short of its treasury bill target in its latest domestic debt auction, raising about GH¢4.09bn against a target of GH¢4.89bn, as investor demand remained strongest at the short end of the curve while appetite for longer-dated paper stayed more restrained.
Results from Tender 2003, held on April 17 for securities to be issued on April 20, show that the government received total bids of roughly GH¢4.49bn across the 91-day, 182-day and 364-day instruments but accepted only GH¢4.09bn. The outcome suggests that while domestic liquidity remains available to the state, demand is still being shaped by investor caution over duration and pricing.
The 91-day bill once again carried the auction, attracting GH¢2.56bn in bids, of which the government accepted GH¢2.54bn. By contrast, the 182-day bill drew GH¢771.16m in bids with GH¢758.04m accepted, while the 364-day bill recorded GH¢1.16bn tendered but only GH¢790.95m accepted, indicating more selective acceptance at the longer end.
That pattern reinforces a continuing theme in Ghana’s domestic debt market: investors remain more comfortable locking funds into shorter maturities, where rate visibility and liquidity risks are easier to manage. For the government, that provides near-term financing support, but it also means rollover pressure remains a central feature of its debt management profile.
The weighted average rates for the week of April 20 to 24 came in at 4.89 percent on the 91-day bill, 6.68 percent on the 182-day bill and 9.20 percent on the 364-day bill. On an interest rate basis, those translated into 4.95 percent, 6.91 percent and 10.13 percent respectively.
The auction also showed that the government was unwilling to accept all bids submitted, particularly on the longer-dated paper. For the 91-day bill, bids were tendered within a discount rate range of 4.50 to 5.13 percent, but only those between 4.50 and 5.00 percent were allotted in full. On the 182-day bill, the tendered range was 6.48 to 7.00 percent, while bids allotted in full ranged from 6.48 to 6.95 percent. For the 364-day bill, the government faced bids between 8.50 and 10.71 percent, but allotted in full only those between 8.50 and 9.39 percent.
That pricing discipline suggests the government is still trying to contain borrowing costs, even if doing so means undershooting its auction target. In effect, Accra appears willing to trade volume for price, particularly where longer-tenor bids come in at levels it considers too expensive.
The latest result also marks a softer fundraising outcome than the previous week. In Tender 2002, held on April 10, the government sold GH¢5.11bn out of GH¢5.31bn tendered. By comparison, the latest sale represents a noticeable decline in both demand absorbed and gross issuance.
Looking ahead, the government has set a new target of GH¢4.48bn for Tender 2004, again covering the 91-day, 182-day and 364-day bills. That next auction will provide another test of whether investor demand can be sustained as the state continues to rely on the domestic money market to meet its near-term funding needs.
The government continues to attract substantial demand from the local market, especially for short-dated paper. But the failure to meet the full target, combined with selective acceptance of bids at the longer end, points to a market that is still funding the sovereign carefully rather than unquestioningly.
