Analyst warns shortfall in treasury bills undermines investor confidence
The Government has once again missed its treasury bills issuance target, as investor preference shifts toward other money market instruments.
Data from the Bank of Ghana shows that the government raised GHS4.760 billion from treasury bills, against a target of GHS6.824 billion.
Speaking on Business Breakfast on Zed, Economic Analyst Emmanuel Boateng explained that this shortfall is primarily driven by investors seeking higher risk-adjusted returns in fixed deposits and alternative instruments. He also highlighted concerns over sovereign risk and prevailing market uncertainty as contributing factors.
“Banks and investor institutions may be diversifying away from government securities due to concerns about sovereign risk or perhaps the uncertainty that clouds the market,” he noted.
Mr. Boateng noted that although the missed target remains within the recent funding range of GHS6.8 billion, the shortfall could have implications for domestic borrowing activities.
He further indicated that the country missed over GHS2 billion in a single auction, and over GHS20 billion in past weeks, suggesting a trend that may undermine confidence in government securities and potentially impact future financing efforts.
“We are in the last quarter of the year, and these signals are eroding market confidence in government securities, which are seen as the safest investment instruments,” Mr Boateng said.
The analyst urged the government to review the shortfalls for the year and identify the causes of the financing gap, warning that continued misses risk further undermining investor confidence.
He concluded that as Ghana continues to manage debt sustainability concerns, these shortfalls are red flags that cannot be ignored.
