Investor demand for Ghana’s short-term government securities remained exceptionally strong at the latest primary market auction, resulting in a significant oversubscription as yields across the Treasury bill curve continued their downward trajectory, data from the Bank of Ghana has shown.
The government had targeted a total of GH¢5.147 billion through the sale of 91-day, 182-day, and 364-day Treasury bills. However, buoyant market liquidity and sustained appetite for government paper saw investors submit total bids of GH¢12.35 billion, representing an oversubscription rate of approximately 139.9%. The Treasury ultimately accepted GH¢6.53 billion of the total bids submitted.
Heavy Concentration in the One-Year Instrument
A detailed breakdown of the auction results revealed a marked investor preference for the longer-dated 364-day instrument, which attracted the bulk of the bids. The one-year bill drew GH¢7.50 billion in bids, accounting for roughly 60.8% of the total bids submitted. Of this, the government accepted GH¢2.75 billion, leaving a substantial GH¢4.75 billion in bids unaccepted.
The 182-day bill saw bids totaling GH¢1.2 billion, with a little over GH¢935 million accepted. Meanwhile, the 91-day bill received GH¢3.5 billion in bids, of which the government accepted GH¢2.8 billion.
Yields Ease Across the Curve
The robust demand allowed the government to raise funds at lower borrowing costs, as yields continued to ease across the maturity spectrum. This trend reflects strong market liquidity and signals the success of the Bank of Ghana’s monetary policy easing cycle, which has seen the policy rate reduced to 14% in March 2026, a level not seen since July 2021.
Specific auction results show:
· The yield on the 91-day bill fell by 13 basis points to 4.94%, down from 5.07% at the previous auction.
· The yield on the 182-day bill declined by 23 basis points to 6.85%, from 7.07%.
· The 364-day bill experienced the sharpest decline, with its yield falling by 82 basis points to 10.77%, from 11.59%.
This movement extends a broader trend observed in recent weeks, where interest rates on short-term instruments have been declining from the elevated levels seen during Ghana’s period of high inflation and fiscal pressure.
A Shift in Fiscal Strategy
The overwhelming demand comes at a critical juncture for Ghana’s fiscal management. Following the Domestic Debt Exchange Programme (DDEP), the government has relied heavily on the Treasury bill market to meet its financing needs, as restrictions prevented the issuance of longer-dated domestic bonds.
However, with those restrictions having expired in March 2026, the Ministry of Finance is now planning to reduce this reliance on short-term borrowing. The government has signaled a return to the medium- and long-term domestic bond market, targeting GH¢17 billion in bond issuances for the remainder of 2026. This strategy is designed to improve the maturity structure of domestic debt and reduce refinancing risks. The current strong demand for short-term paper provides the Treasury with a stable base to facilitate this transition.
Market Outlook
Looking ahead, the government is seeking to raise GH¢6.554 billion in its next auction. The strong bidding patterns suggest that investor appetite for government securities remains undiminished, even as yields decline. This confidence is further buoyed by government measures to improve fiscal prudence, including the build-up of a debt repayment “war chest,” which has already reached GH¢15.6 billion to service future obligations.
With falling inflation and a stable policy rate environment, financial analysts anticipate that demand for short-term instruments will remain firm, granting the Treasury favorable conditions to meet its borrowing requirements at lower yields amid elevated liquidity conditions in the market.
