Ghana Government Misses T-Bill Target by 55%, the Sharpest Undersubscription in 2025

Ghana’s government recorded its biggest Treasury bill undersubscription of the year after investors bid far less than expected at last week’s auction, signaling tightening liquidity and rising caution in the short-term debt market.

According to auction results published by the Bank of Ghana (BoG), the government raised GH¢2.92 billion in bids against a target of GH¢6.57 billion, representing a staggering 55% shortfall. The miss comes just a week after the Treasury posted a 23% oversubscription, underscoring how volatile investor appetite has become in recent weeks.

Of the total bids tendered, the government accepted GH¢2.08 billion, reflecting a more conservative approach to its short-term borrowing strategy.

91-Day Bill Dominates Demand

The 91-day bill remained the most sought-after instrument, accounting for about 71.2% of total bids — down from 83% in the previous auction. Investors tendered GH¢2.085 billion for the three-month paper, with nearly all (GH¢2.080 billion) accepted.

The 182-day bill attracted GH¢704.6 million in bids, with GH¢699 million accepted, while the 364-day bill received GH¢136.5 million, of which GH¢110 million was accepted.

Market analysts suggest the decline in subscription levels may reflect tight liquidity conditions within the banking system and a general shift in investor sentiment, with buyers demanding higher yields to offset rising inflation and fiscal pressures.

Yields Continue Upward Climb

Despite the undersubscription, yields across all maturities continued to rise modestly, pointing to persistent inflationary pressure and investor demands for higher returns.

The 91-day bill yield climbed 16 basis points to 10.69%, while the 182-day yield rose to 12.43%, up from 12.30% the previous week. The 364-day bill yield inched up 5 basis points to 12.92%.

These yield movements signal the government may have to offer even more attractive rates to meet its short-term financing needs in the coming weeks.

Analysts Warn of Growing Fiscal Pressure

Financial analysts say the shortfall in T-bill sales could put additional pressure on the government’s cash flow, particularly as it seeks to roll over maturing debt while funding essential spending obligations.

“The missed target is a strong indicator of constrained liquidity and cautious investor positioning,” said a senior analyst at a local brokerage firm. “Unless the government raises yields further, future auctions may continue to face undersubscriptions.”

The Bank of Ghana’s recent tightening of monetary conditions to stabilize the cedi and contain inflation may also be limiting the pool of funds available for Treasury securities.

Outlook for the Coming Weeks

With over GH¢6 billion in short-term maturities due by the end of the month, market watchers expect the Treasury to revisit its pricing strategy or scale back its issuance targets.

The undersubscription could also prompt closer coordination between the Ministry of Finance and the Bank of Ghana to manage liquidity and sustain investor confidence in domestic debt instruments.

The sharp drop in participation underscores the challenges facing Ghana’s domestic debt market as the government navigates its path toward fiscal consolidation and debt sustainability.

Source: Accra Business News