Ghana misses T-bill targets three weeks in a row amid falling yields and investor confidence

By Emmanuel Boateng

Ghana’s government has missed its Treasury bill (T-bill) auction targets for three consecutive weeks, pointing to rising investor caution and growing unease within the domestic debt market. Despite efforts to lower borrowing costs through falling yields, the state has consistently come up short of its fundraising goals, a worrying sign for a government heavily reliant on domestic borrowing to fund its fiscal operations.

The most recent T-bill auction, held on June 13, 2025 (Tender 1959), saw the government aim for GHS7.59 billion across the 91-day, 182-day, and 364-day tenors. However, the amount accepted totaled GHS7.19 billion, just shy of the target, even though investor bids amounted to GHS7.22 billion. This minor shortfall capped a three-week streak of underperformance. The two previous auctions, on June 5 (Tender 1958) and May 30 (Tender 1957), were even more concerning. On June 5, the government sought GHS6.67 billion but managed to accept only GHS4.38 billion. A week prior, on May 30, it aimed to raise GHS3.89 billion but accepted just GHS3.54 billion.

This sequence marks a clear deviation from the results of the May 23 auction (Tender 1956), where the government exceeded its target of GHS5.55 billion, accepting GHS5.97 billion in bids. Since then, the auctions have steadily reflected weaker investor appetite or increasingly selective bid acceptance by the government, or, more likely, a combination of both.

Compounding the issue is the continued decline in yields across the board. Over the four-week period, the weighted average interest rate on the benchmark 91-day bill fell from 14.93 percent to 14.70 percent, while the 364-day bill dropped from a high of 16.00 percent to 15.74 percent. These reductions suggest that the government may be deliberately pushing for cheaper financing in the face of rising debt servicing costs. However, the falling yields appear to be doing little to reignite investor enthusiasm.

Several analysts interpret the lower yields as a sign of either improving inflation expectations or the government’s unwillingness to borrow at a higher cost. Yet, the market’s subdued response indicates a deeper concern. Investors may be uncertain about Ghana’s fiscal outlook, particularly in a pre-election environment where spending pressures often mount. Furthermore, ongoing implementation of IMF-supported reforms may have introduced uncertainty, especially around future taxation, expenditure controls, or debt sustainability measures.

One notable aspect of recent auctions is the selective acceptance of bids, particularly for the 364-day instruments. On June 5, for instance, out of GHS157 million in bids for the 364-day bill, only GHS48 million was accepted. The rest were likely rejected due to unattractive pricing from the government’s perspective. While this strategy helps avoid locking in high interest rates for longer tenors, it also limits the government’s ability to raise funds, forcing it to rely more heavily on shorter-term debt, which comes with refinancing risks.

The consistent undersubscription also reflects a maturing domestic investor base, one that is increasingly discerning and potentially liquidity-constrained. With treasury yields compressing, institutional investors such as banks, pension funds, and asset managers may be reallocating capital toward higher-yielding instruments, such as corporate debt or offshore assets, where permitted.

Looking ahead, the government is scheduled to issue GHS4.55 billion worth of T-bills in its next auction. Market watchers will be keen to see whether the trend of underperformance continues, or if the Ministry of Finance adjusts its pricing strategy to re-attract demand. If conditions remain tight, the government may need to weigh alternatives, such as central bank financing, further drawdowns on concessional loans, or possibly adjusting fiscal outlays.

Ultimately, while the recent auctions have not triggered an immediate crisis, they underscore growing challenges in Ghana’s domestic debt management. If investor sentiment does not improve, either through more attractive yields, macroeconomic clarity, or fiscal discipline, the government’s reliance on short-term debt could become increasingly difficult to sustain.