Government of Ghana records 6th consecutive T-bill undersubscription in April 24 auction

The Government of Ghana continues to face mounting challenges in the domestic debt market, as its latest Treasury bill auction held on April 24 recorded a sixth consecutive undersubscription, highlighting persistent investor caution and tightening liquidity conditions.

The government aimed to raise GHC4.475 billion to support short-term financing needs and refinance maturing debt obligations. However, total investor bids fell slightly short, reaching GHC4.433 billion—representing about 98.08% of the target.

Despite the relatively strong investor participation, the government ultimately accepted only GHC3.897 billion across the three Treasury bill tenors. This resulted in a funding shortfall of approximately GHC577.9 million, marking yet another instance where the state has been unable to fully meet its borrowing target through the Treasury market in 2026.

A breakdown of the auction results shows varying levels of demand and acceptance across the different maturities. The 91-day Treasury bill attracted the highest interest, with bids totaling GHC2.756 billion. Out of this, the government accepted GHC2.710 billion at a yield of 4.92%, suggesting a relatively stable short-term borrowing cost.

For the 182-day bill, investors submitted bids worth GHC717.64 million, of which GHC664.37 million was accepted at an interest rate of 6.96%. Meanwhile, the 364-day bill saw offers amounting to GHC960.08 million, but the government accepted only GHC522.48 million at a significantly higher yield of 10.12%.

The lower acceptance rate—approximately 87% of the original target—indicates a strategic decision by the government to reject some bids, particularly those with higher interest rate demands. Analysts suggest that authorities are attempting to manage borrowing costs and avoid locking in expensive debt, especially in the longer-term 364-day instrument where yields tend to be higher.

This trend reflects a delicate balancing act for the government: securing sufficient funding to meet fiscal obligations while maintaining debt sustainability and controlling interest costs. The repeated undersubscriptions also point to lingering concerns among investors regarding risk, inflation expectations, and overall economic conditions.

As the government continues to navigate these financial pressures, market watchers will be closely monitoring future auctions for signs of improved investor confidence and more favorable borrowing conditions.