-Targeted Over GH¢24 Bn in September, Secured GH¢19.5 Bn
The government’s aggressive borrowing, which intensified in August, persisted in September, signaling a continued reliance on borrowing to meet fiscal needs.
Despite aiming to raise GH¢24.3 billion through treasury bill auctions over the four weeks of September, the government fell short by 19.66%, securing GH¢19.5 billion. This follows the August borrowing of GH¢23 billion, which also missed its target of GH¢26.29 billion.
A weekly analysis shows the government borrowed an average of GH¢4.88 billion per week in September, just slightly higher compared to GH¢4.86 billion per week in August. However, the government’s borrowing target per week was much higher in September at GH¢6 billion, compared to GH¢5.2 billion in August, reflecting a stronger borrowing appetite in September.
This aggressive borrowing in September surpasses earlier months, including GH¢15.75 billion in July, GH¢16.7 billion in June, and GH¢15.7 billion in May.
To sustain this borrowing pace, the government raised interest rates on treasury bills, which had been declining since January. The rate for the 91-day bill, which had dropped to 24.78% by the end of July, rose by nearly 100 basis points to 25.64% by the end of September.
Meanwhile, data from the Bank of Ghana shows a steady increase in the country’s total debt stock. Between January and July, the national debt surged from GH¢633.3 billion to GH¢761.2 billion. Domestic debt also grew, rising from GH¢265.6 billion in January to GH¢290.9 billion by the end of July.
As a percentage of Gross Domestic Product (GDP), the debt ratio climbed from 63.2% in January to 75.7% in July, excluding the borrowing surge in August and September. If the borrowing spree persists, the government may end the year with a larger-than-expected budget deficit, potentially reversing fiscal gains made earlier in the year. Such fiscal behaviour risks severe economic consequences in the following year.
