Gov’t T-bill rejections show fiscal discipline — Analyst
By Rebecca Okine
Economic analyst Mr. Emmanuel Boateng says the government’s decision to reject large portions of treasury bill bids in its latest auction signals a strategic move to reduce long-term borrowing costs and manage public debt.
According to the Bank of Ghana’s latest auction results released on June 7, 2025, the government received bids totaling GH¢5.47 billion but accepted only GHS4.38 billion, rejecting GHS1.1 billion. The target for the week’s auction was GHS6.67 billion.
Of particular note was the 364-day bill, for which GHS157.18 million was tendered. The government accepted just GHS48.44 million—less than a third of the amount offered. Mr. Boateng explained that the low uptake on the longer-term instrument reflects the government’s reluctance to commit to high-yield obligations over extended periods.
“The 364-day bill locks the government into a fixed rate for a full year, so by rejecting most of the bids, they are signaling a preference to wait for yields to fall before taking on more long-term debt,” he explained.
In contrast, uptake was higher for shorter-term bills. The 91-day instrument accounted for the majority of bids, with GHS3.5 billion tendered. The 182-day bill saw GHS1.8 billion in bids, of which GHS1.67 billion was accepted.
Mr. Boateng emphasized that the government’s approach is not about missing borrowing targets but about strategically timing its debt commitments.
“By borrowing less now and more later when rates drop further, they reduce the future burden of interest payments,” he said.
Interest rates on treasury bills also declined in the latest auction. The 182-day bill fell by three basis points to 15.45 percent, while the 364-day bill dropped by 12 basis points to 15.71 percent.
Mr. Boateng added that these falling yields align with broader macroeconomic indicators.
“Inflation recently dropped from 21.2 percent to 18.4 percent, which is significant. When inflation and yields are both on a downward path, it strengthens the case for monetary easing and prudent fiscal management,” the financial analyst noted.
He described the current strategy as “a reflection of discipline,” where the government is less concerned with meeting arbitrary fundraising targets and more focused on long-term fiscal sustainability.
“The decision to accept smaller volumes at better rates, rather than locking into expensive debt, shows an awareness of future trends. It’s like buying less today because you know prices will drop tomorrow,” he added.
With yields declining and inflation moderating, the government is expected to increase borrowing at a lower cost, easing pressure on the public purse in the medium to long term, according to Mr. Boateng.
