Government Surpasses T-Bill Target as Investor Confidence Soars

The government has once again exceeded its Treasury bill (T-bill) borrowing target, underscoring strong investor confidence in Ghana’s money market.

According to the latest auction results from the Bank of Ghana, the government secured GHS 9.6 billion in bids last week, far surpassing its initial target of GHS 7.73 billion by 165%. Despite receiving bids exceeding GHS 10 billion, authorities capped the accepted amount at GHS 9.6 billion, reflecting a cautious approach to managing debt levels.

Breaking down the figures, the 91-day T-bill attracted bids worth GHS 7.38 billion, with GHS 4.23 billion accepted. Similarly, the 182-day bill saw bids totaling GHS 5 billion, of which GHS 1.43 billion was accepted. The 364-day bill also recorded significant interest, with bids reaching GHS 8.11 billion and GHS 3.96 billion accepted.

Despite the oversubscription, yields on short-term government securities declined, signaling a shift in market dynamics. The 91-day T-bill rate dropped to 24.47%, down from 26.85%, while the 182-day bill rate fell to 25.38% from 27.80%. The 364-day bill rate also decreased to 27.29% from 29.07%. These declines reflect a combination of improved investor confidence and adjustments to evolving market conditions.

Looking ahead, the government plans to raise an additional GHS 6.49 billion in debt on Friday, February 28, 2025. Market analysts expect investor interest to remain robust, even as yields continue to adjust. The strong demand for T-bills highlights the attractiveness of government securities as a safe investment option, particularly in an uncertain economic climate.

This trend also suggests that investors remain optimistic about Ghana’s economic prospects, despite recent challenges. The government’s ability to consistently exceed its borrowing targets demonstrates its access to liquidity and its capacity to meet financing needs. However, the decline in yields raises questions about the long-term sustainability of such high demand, especially as market conditions evolve.

As the government prepares for its next auction, all eyes will be on whether investor confidence remains steady and how yields respond to ongoing economic developments. For now, the strong performance of T-bills underscores the resilience of Ghana’s financial markets and the continued trust investors place in government securities.