Declining T-bill rates discourage investors —Analyst
By: Rebecca Okine
Economic analyst Emmanuel Boateng has cautioned that Ghana’s declining Treasury bill (T-bill) rates are discouraging investors, a trend that could deepen the government’s short-term financing challenges.
His warning follows the Bank of Ghana’s latest auction on Friday, 15 August 2025, where the government failed to meet its T-bill target for the second consecutive week.
The Treasury aimed to raise GHS4.24 billion but secured just under GHS3 billion, falling short by nearly 30 percent.
Speaking on Business Breakfast on ZED 101.9FM yesterday, Mr Boateng attributed the weak investor turnout mainly to unattractive yields.
He explained that investors, particularly institutions that dominate the T-bill market, are benchmarking returns against inflation and the rising cost of living. Many conclude they are making negative real gains.
“It’s quite significant. The major reason is the rates. They are falling. If you compare what people earn from the Treasury bill market to inflation or the cost of goods and services, you will realise many investors are actually losing out. Should they continue to suffer?,” Mr Boateng questioned.
According to the economic analyst, the issue is not a lack of liquidity in the economy but rather poor incentives.
“I don’t think it is because people don’t have money. The bulk of these investments are from institutional investors. But if they are making negative returns, they would have to take the right investment decision,” he explained.
He stressed that finance managers are obliged to make rational choices.
“Once the Treasury bill market is not offering enough returns, then they tend to look elsewhere so that they are able to make the gains,” Mr Boateng stated.
The economic analyst illustrated the point with an example: “If savings accounts yield around 5 percent and Treasury bills offer returns of just 10 to 11 percent against an inflation rate of 12.1 percent, investors are effectively losing money.”
“Imagine someone whose investment money is spent on items that cost more than 12.1 percent. That person really is in the negative,” he warned.
The economic analyst further pointed out that declining T-bill yields undermine the government’s borrowing strategy. Reduced investor interest means financing targets are consistently missed.
“This is not the first time,” he remarked while indicating that unless returns improve, investors will continue to redirect funds into more profitable ventures.
Mr Boateng urged policymakers to reassess the T-bill strategy to ensure it remains an attractive investment option.
“At the end of the day, investors are looking for value. If Treasury bills do not offer that, the market will naturally shift elsewhere,” he added.
