Gov’t Misses Treasury Bill Target by GHS 2.33 Billion Amid Competition From BoG Instruments
The Government of Ghana continues to grapple with undersubscription challenges in its short-term debt market, falling short of its latest Treasury bill (T-bill) auction target by approximately GHS 2.33 billion. This marks the fourth consecutive week of auction shortfalls as investors increasingly turn to higher-yielding instruments offered by the Bank of Ghana (BoG).
According to results released by the BoG, the government successfully raised GHS 4.49 billion from the auction, against a target of GHS 6.83 billion. Analysts attribute the persistent undersubscription to strong investor appetite for the BoG’s 56-day bills, which currently offer yields around 21 percent, well above the returns on conventional T-bills.
Yields on T-bills continued their upward trajectory, reflecting heightened investor demand for compensation amid tightening liquidity conditions. The 91-day bill cleared at 10.92 percent, up from 10.81 percent in the previous auction, while the 182-day and 364-day bills rose to 12.61 percent and 13.01 percent, respectively, from 12.49 percent and 12.95 percent. Despite the increase, short-term securities remain less attractive compared to alternative instruments, putting additional pressure on government borrowing costs.
Looking ahead, the government plans to raise GHS 5.67 billion in its upcoming auction across the 91-, 182-, and 364-day maturities. Market observers will be closely watching whether investor demand rebounds or if the trend of undersubscription continues in November, potentially complicating efforts to fund fiscal operations.
The recent pattern underscores the challenges facing the government in managing its debt portfolio, particularly in a market where competitive yields and alternative investment opportunities shape investor behaviour.
