Gov’t mobilizes GHS 2.5bn in bids for short-term T-Bills
The Government of Ghana’s recent issuance of short-term debt securities, including 91-day, 182-day, and 364-day T-Bills, has seen oversubscription by GHS 572m, indicating strong investor demand. The total bids tendered by primary dealers amounted to GHS 2,530m, exceeding the government’s auction target of GHS 1,958m.
The government was able to accept all bids tendered for the three securities, with the interest rates ranging from 19.8% for the 91-day T-Bill to 27.2% for the 364-day T-Bill. However, despite the high interest rates, returns on these treasury bills continue to be negative, primarily due to the country’s persistently high inflation rate, which stood at 45% at the end of March 2023.
The government’s successful issuance of short-term debt securities reflects its ongoing efforts to manage the country’s financing needs and meet its budgetary requirements. The upcoming issuance of 91-day and 182-day T-Bills on April 28, 2023, is part of this strategy, with the government aiming to secure GHS 1,585m in fresh funding.
The oversubscription of the recent debt securities issuance highlights investors’ confidence in the Ghanaian economy, despite its ongoing challenges, including high inflation, a large fiscal deficit, and a volatile currency. Nevertheless, the government’s efforts to address these issues, including through fiscal consolidation measures and support from international financial institutions, have helped maintain investor interest in the country’s debt securities.
The government’s ability to mobilize significant funding through short-term debt securities also reflects the strength of Ghana’s primary dealer network, which facilitates the issuance and trading of government securities in the domestic market. This network includes banks, brokers, and other financial institutions, which play a crucial role in ensuring the liquidity and stability of Ghana’s debt market.
Looking ahead, the government will need to continue its efforts to manage its fiscal and economic challenges effectively, including through ongoing structural reforms and prudent macroeconomic policies. These measures will be critical to maintaining investor confidence in Ghana’s debt securities and sustaining the country’s long-term economic growth and development.