Short-term debt securities oversubscribed by GHS 482m; reflecting strong investor demand
The Government of Ghana’s recent issuance of short-term debt securities has demonstrated its commitment to managing the country’s financing needs and meeting its budgetary requirements. The oversubscription of the 91-day and 182-day T-Bills by GHS 482m, with total bids tendered by primary dealers amounting to GHS 2,067m, reflects strong investor demand for Ghana’s debt securities.
Despite the high interest rates offered by the government for these short-term securities, 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. However, the government’s ability to accept all bids tendered for these two securities, with interest rates ranging from 19.9% for the 91-day T-Bill to 22.7% for the 182-day T-Bill, demonstrates the confidence of investors in the Ghanaian economy.
The government’s upcoming issuance of 91-day, 182-day, and 364-day T-Bills on May 5, 2023, is part of its strategy to secure GHS 1,834m in fresh funding. This is a critical move in the country’s ongoing efforts to manage its financing needs and meet its budgetary requirements. It is also an important step towards addressing the country’s persistently high inflation rate and reducing the fiscal deficit, which stands at 11% of GDP.
Despite the country’s ongoing economic challenges, including high inflation, a large fiscal deficit, and a volatile currency, Ghana remains an attractive destination for investors. This is evidenced by the oversubscription of the recent debt securities issuance, which highlights investors’ confidence in the economy.
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 strength of Ghana’s primary dealer network, which facilitates the issuance and trading of government securities in the domestic market, has also played a crucial role in ensuring the liquidity and stability of Ghana’s debt market.
Going forward, the government will need to continue its efforts to manage its fiscal and economic challenges effectively. This will require ongoing structural reforms and prudent macroeconomic policies, which will be critical to restoring investor confidence in Ghana’s debt securities and sustaining the country’s long-term economic growth and development.
Ghana’s recent issuance of short-term debt securities has seen oversubscription, indicating strong investor demand. The government’s ongoing efforts to manage the country’s financing needs and meet its budgetary requirements have been critical in maintaining investor interest in the country’s debt securities. Despite ongoing economic challenges, Ghana remains an attractive destination for investors, and the government’s continued efforts to address these issues will be crucial to sustaining the country’s long-term economic growth and development.
