Ghana’s Treasury bill market witnessed a dramatic surge in investor appetite at the latest auction, with the government exceeding its target by a remarkable 76.4 per cent. The Treasury raised GH¢5.06 billion in total bids, far surpassing its target of GH¢2.86 billion, as the sustained disinflation and a more accommodative monetary policy environment continued to reshape the yield curve.
The auction results, released by the Bank of Ghana on Friday, showed that the Treasury accepted GH¢4.40 billion of the total bids tendered. The overwhelming demand, which defied analysts’ predictions of relatively soft investor interest, signals growing confidence in Ghana’s macroeconomic stability and the government’s fiscal consolidation efforts.
91-Day Bill Dominates as Investors Flock to Short-Term Instruments
The bulk of the demand was concentrated at the short end of the curve, with the 91-day bill attracting GH¢3.278 billion in bids — approximately 64.9 per cent of the total. The Treasury accepted GH¢3.006 billion of those bids. The 182-day instrument received bids totaling GH¢1.305 billion, of which GH¢1.257 billion was accepted.
The 364-day bill, however, saw a significant disparity between bids and acceptance. Investors tendered GH¢468.92 million, but the Treasury accepted only GH¢136.26 million — a rejection rate of nearly 71 per cent, suggesting the government was unwilling to lock in longer-term debt at current yields or that the bids did not meet its pricing expectations.
Yields Continue Downward Trajectory
Interest rates on the yield curve continued to soften, a trend that has been consistent throughout 2026. The yield on the 91-day bill — the benchmark for short-term borrowing in Ghana — declined by 4.0 basis points to 4.60 per cent. The 182-day bill dropped to 6.27 per cent from 6.31 per cent the previous week, while the 364-day bill fell by 5.0 basis points to 9.75 per cent.
The sustained decline in Treasury bill yields represents a dramatic turnaround from the crisis-era peaks. At the end of 2022, when Ghana defaulted on its sovereign debt, Treasury bill rates had soared above 30 per cent as investors demanded hefty premiums to hold government paper. The 91-day bill rate was 14.7 per cent as recently as June 2025, meaning it has fallen by over 1,000 basis points in just over a year.
A Story of Macroeconomic Turnaround
The latest auction results are the culmination of one of the most remarkable economic recoveries in Africa. Ghana’s inflation rate, which peaked at 54.1 per cent in 2022, has fallen dramatically to 5.2 per cent in September 2026, aided by a stabilization of the exchange rate, a tighter monetary policy stance that was later eased, and lower global commodity prices.
The Bank of Ghana’s Monetary Policy Rate, which stood at 28.0 per cent in June 2025, was progressively reduced through a series of cuts to 14.0 per cent by March 2026. The MPC has since held the rate steady at 14.0 per cent through three consecutive meetings (July, September), citing rising inflation risks and geopolitical tensions.
“Given the sustained improvement in macroeconomic indicators — strong reserve buffers, relative currency stability, and robust domestic activity — and the favourable inflation outlook, conditions support a recalibration of the monetary policy stance,” the MPC noted in its March 2026 decision statement.
Fiscal Consolidation and Debt Sustainability
The fiscal picture has also improved markedly. Ghana’s primary fiscal balance shifted from a deficit of 4.3 per cent of GDP in 2022 to a surplus of 2.1 per cent in 2025, exceeding the program target of 1.5 per cent of GDP. Public debt declined from approximately 93 per cent of GDP in 2022 to 45 per cent of GDP by end-June 2026.
The government completed the Domestic Debt Exchange Programme in 2023, the Eurobond exchange in 2024, and the SADEREA notes exchange in July 2026, effectively concluding the restructuring of its bonded external debt. The International Monetary Fund upgraded Ghana’s debt distress risk from “high” to “moderate” in 2026, acknowledging the country’s sustained fiscal consolidation and decisive progress in debt restructuring.
The government has been able to reduce its domestic borrowing costs substantially. According to the 2026 Mid-Year Fiscal Policy Review, the government saved GH¢4.2 billion in domestic interest costs between January and June 2026 alone. “Government is now borrowing from the domestic money market at less than half the cost it did at the beginning of 2026,” the review noted.
External Buffers Strengthen
Ghana’s external position has strengthened significantly, boosting confidence in the cedi. The current account recorded a surplus of 8.2 per cent of GDP in 2025 and 3.8 per cent of GDP at end-June 2026, largely supported by robust gold exports and solid remittance inflows. Gross international reserves increased to US$10.9 billion in June 2026, equivalent to 4.2 months of forward import cover, exceeding the IMF program target.
The cedi has been relatively stable in 2026, trading at approximately GH¢11.79 to the US dollar as of early October, after depreciating by about 4.8 per cent in the first quarter of the year amid corporate dollar demand. The stability of the currency has been a critical factor in anchoring inflation expectations and encouraging investor participation in the domestic debt market.
Broader Context: From Debt Crisis to Recovery
Ghana’s economic trajectory over the past four years represents one of the most dramatic turnarounds in recent African economic history. The country defaulted on its sovereign debt in December 2022, triggering a severe currency crisis, capital flight, and an inflation spiral. The government subsequently entered into a US$3 billion Extended Credit Facility arrangement with the IMF in May 2023, committing to far-reaching fiscal consolidation and structural reforms.
The reform agenda included the Domestic Debt Exchange Programme, which restructured approximately GH¢82 billion in domestic debt; the completion of bilateral debt restructuring agreements with official creditors; and the conclusion of negotiations with private commercial lenders. By mid-2026, the government had signed fifteen bilateral restructuring agreements and reached agreements-in-principle with ten additional commercial lenders.
Looking Ahead
The auction results come at a critical juncture. The government is set to begin implementation of the Credit Risk Management Directive for Banks, Savings and Loans, Finance Houses, and Financial Holding Firms from July 1, 2027, a measure aimed at enhancing the resilience of regulated financial institutions. Meanwhile, private-sector credit growth has rebounded significantly, growing by 35.5 per cent in August 2026, compared with 13.3 per cent a year earlier, as banks take advantage of lower interest rates and improved economic conditions.
Analysts will be watching closely to see whether the strong demand for Treasury bills persists as the government continues to manage its domestic debt profile. The rejection of a large portion of 364-day bids suggests the Treasury is being strategic about its financing mix, potentially preferring shorter-dated instruments while it waits for longer-term yields to decline further. For now, the market’s verdict is unmistakable: Ghana’s recovery is gaining momentum, and investors are responding.
The next Treasury bill auction is scheduled for the week commencing October 12, 2026, with the government targeting approximately GH¢2.9 billion.
