Ghana’s Finance Ministry faces mounting criticism over its management of Treasury bill rates, with economist and parliamentary advisor Dr. Gideon Boako labeling recent declines as “artificial” and economically risky.
The deputy ranking member on Parliament’s Finance Committee accused the government of manipulating rates for short-term political gains, a strategy he claims has now unraveled as investor demand falters.
Market data underscores Boako’s concerns. For the first time since the new administration took office, Ghana’s Treasury bill auction last week recorded an undersubscription, with the government securing just GH¢3.3 billion of its GH¢6.14 billion target—a 46% shortfall. This follows weeks of oversubscription where authorities routinely rejected excess bids to suppress rates. The decline coincides with another week of falling yields: 91-day bills dipped to 15.73%, 182-day rates held at 16.92%, and 364-day bills dropped to 18.84%. Analysts suggest persistently lower returns are driving investors to seek alternatives.
While reduced borrowing costs could theoretically free capital for private sector growth, Ghana’s suspended bond market—a consequence of its Domestic Debt Exchange Program—leaves T-bills as the primary fundraising tool. A prolonged investor retreat could strain fiscal operations, complicating efforts to stabilize an economy still recovering from debt restructuring.
The policy discord between fiscal and monetary authorities has further heightened risks. The Bank of Ghana recently raised its benchmark interest rate by 100 basis points to 28% to combat inflation, directly countering the Finance Ministry’s rate suppression. “Macroeconomic management is critical to national financial stability,” Boako stated, emphasizing the “worrying lack of coordination” between institutions.
In a social media post, he questioned the sustainability of the government’s approach: “How do they feel now that their so-called ‘artificial’ drop in T-bill rates, engineered for propaganda, has been undone?” The remarks highlight growing scrutiny of Ghana’s economic stewardship as it navigates competing priorities of debt management, inflation control, and investor confidence.
