Government raised about GH¢120.2 billion from the Treasury bill market during the first four months of 2026, despite investors submitting bids worth roughly GH¢181.5 billion over the period.
Figures from the Bank of Ghana show the Treasury adopted a cautious borrowing approach, seeking to meet its financing needs while keeping borrowing costs under control amid changing market conditions.
Strong Demand Early in the Year
Investor appetite for T-bills remained robust from January through mid-March, leading to 11 straight oversubscribed auctions. The highest demand was recorded in mid-February, when investors tendered GH¢22.67 billion against a government target of GH¢6.42 billion.
The strong participation reflected ample liquidity in the market and continued confidence in short-term government securities.
Demand Weakens as Rates Fall
However, market momentum slowed from late March into April as Treasury bill yields declined significantly. During this period, the market experienced six consecutive undersubscribed auctions.
One of the weakest performances came during Tender 2002, where investor bids totaled GH¢5.31 billion, well below the GH¢7.57 billion target.
Shift in Investor Preference
The drop in yields also altered investor behavior across the various maturities. Earlier in the year, investors showed greater interest in longer-term instruments, with the 364-day bill attracting GH¢15.18 billion in bids in January.
By April, interest in that tenor had dropped sharply to about GH¢3.12 billion, as investors became reluctant to lock in funds at lower returns.
In the final auction of April, the 91-day bill attracted the highest demand, receiving GH¢2.8 billion in bids, of which GH¢2.7 billion was accepted. The 182-day bill recorded GH¢717.6 million in bids with GH¢664.4 million accepted, while the 364-day bill drew GH¢960.1 million, with only GH¢522.5 million taken up.
Yields Continue to Decline
Treasury bill rates fell considerably over the review period. The average yield on the 91-day bill dropped from 11.12 percent at the start of the year to 4.92 percent by the end of April. Similarly, the 364-day bill declined from 12.93 percent to 10.20 percent.
The lower yields reduced the appeal of government securities, particularly for investors seeking stronger returns on longer-term instruments.
Treasury Focused on Cost Control
Analysts say the government appears to have taken advantage of strong liquidity conditions earlier in the year to secure funding while rates were relatively higher.
As market yields declined, the Treasury became more selective, rejecting sizeable portions of bids in a bid to limit borrowing costs rather than fully meeting auction targets.
The trend highlights the government’s effort to balance its financing requirements with prudent debt management as conditions in the money market continue to evolve.
Source: businesspostonline
