Ghana’s Treasury bill market recorded its fifth straight week of undersubscription, with the government falling short of its borrowing target by GH¢300 million in the latest auction—raising fresh concerns about investor appetite amid a continued decline in yields.
According to the auction results published by the Bank of Ghana, the government aimed to raise GH¢3.9 billion last week, a slight reduction from the GH¢4.6 billion target set two weeks prior. However, total bids submitted amounted to GH¢3.6 billion, resulting in a 7.7 percent shortfall.
The majority of bids came from the 91-day bill, totaling GH¢2.9 billion. The 182-day and 364-day bills attracted GH¢616.75 million and GH¢129.6 million respectively.
Despite the shortfall, the government accepted only GH¢3.3 billion out of the total bids, rejecting GH¢217 million in offers. Analysts attribute the rejections to interest rates that exceeded the government’s pricing expectations, in line with its ongoing strategy to push yields downward.
Interest rates on all instruments recorded slight declines. The 91-day bill dropped from 14.6976 percent to 14.6938 percent, while the 182-day bill saw a marginal dip from 15.2540 percent to 15.2506 percent. The 364-day bill also declined, falling from 15.6936 percent to 15.6564 percent.
The consistent undersubscription has sparked debate among market watchers, who warn that declining yields may be weakening the incentive for investors. Many are reportedly shying away from short-term government securities due to the diminished returns, which now offer less value in real terms amid ongoing macroeconomic uncertainty.
“The drop in yields is part of the government’s broader agenda to reduce borrowing costs, but it’s creating a mismatch between market expectations and investor appetite,” said one financial analyst.
The trend poses a challenge for fiscal planning. T-bills are a critical source of short-term financing for the state’s recurrent expenditures, and persistent shortfalls could tighten liquidity for budgetary obligations.
With limited alternative funding options, the government faces mounting pressure to balance its interest rate strategy with the need to attract sufficient market participation.
For the upcoming auction, the government has set a lower borrowing target of GH¢3.4 billion. All eyes will be on whether this reduced figure helps ease the undersubscription trend or whether the market’s hesitance will persist.
