Ghana’s government struggled to attract investors to its short-term debt securities for the fourth consecutive week, with treasury bills falling nearly 48% short of borrowing targets as interest rates declined.
The Bank of Ghana’s latest auction data shows the government sought GH¢6.7 billion but received bids totaling only GH¢3.5 billion. The GH¢3.2 billion shortfall represents a 47.9% undersubscription rate, continuing a troubling pattern that has persisted throughout January.
This marks the worst performance in a month-long streak of disappointing auctions. Three weeks ago, the government missed its target by GH¢1.2 billion, followed by a GH¢608 million shortfall two weeks later. The consistent underperformance suggests growing investor reluctance toward government paper.
The 91-day bills attracted GH¢2.0 billion in bids, while 182-day securities drew GH¢1.1 billion. Longer-term 364-day bills managed just GH¢321 million from investors. Despite the weak demand, authorities rejected GH¢166 million worth of submitted bids, accepting only GH¢3.3 billion.
Interest rates dropped across all maturities during the auction. The 91-day bill yield fell from 10.4197% to 10.3265%, while 182-day rates declined marginally from 12.3861% to 12.3724%. The 364-day instrument saw rates slip from 13.0043% to 12.9985%.
The rate cuts contrast sharply with increases seen two weeks earlier, when the government raised yields to attract more participation. The recent declines may reflect official attempts to reduce borrowing costs, but appear to be discouraging investor interest instead.
Financial analysts are watching closely as the government prepares this week’s auction with a more modest GH¢3.8 billion target. The reduced borrowing goal could signal acknowledgment of current market conditions, though it remains unclear whether demand will recover.
The persistent shortfalls raise questions about domestic appetite for government debt amid Ghana’s ongoing economic challenges. Local institutional investors and banks typically dominate treasury bill auctions, but their participation has clearly weakened in recent weeks.
Market observers will be monitoring whether the lower borrowing target helps restore investor confidence or if the trend continues. The outcome could influence broader fiscal planning and debt management strategies in the coming months.
