The government has recorded its ninth consecutive oversubscription on the Treasury bills market, reinforcing that investor appetite for the bills continues to outpace its borrowing target by a wide margin.
The 62% oversubscription in the last auction, despite a relatively huge target, analysts believe, underscores both strong market liquidity and rising short-term financing needs.
At last week’s auction, as published by the Bank of Ghana (BoG), the government sought to raise GHS 9.83 billion, but investors submitted bids worth GHS 15.91 billion, translating into an oversubscription of about 62%.
In the end, the government accepted GHS 12.80 billion, taking in nearly GHS 3.0 billion more than it initially planned, while rejecting bids worth roughly GHS 3.11 billion.
This marks the ninth week in a row that demand at the T-bills auction has exceeded the government’s target, a streak that reflects sustained investor confidence in short-term government bills. At the same time, the government’s willingness to accept significantly more funds than advertised points to pressing financing pressures, likely linked to maturing bills coming due or urgent expenditure commitments that need to be met.
Per the auction results, there was a strong interest across all tenors. The 91-day bill attracted GHS 4.2 billion, the 182-day bill recorded GHS 4.3 billion, while the 364-day bill, unusually, dominated demand with GHS 7.5 billion in bids.
The heavy tilt toward the one-year paper suggests that many investors are increasingly comfortable locking in funds for longer periods, even as rates edge higher.
On the interest rate front, yields continued their gradual upward drift, adding to concerns about the rising cost of government borrowing. The 91-day bill ticked up to 11.1946%, the 182-day bill rose from 12.6485% to 12.6656%, while the 364-day bill climbed more noticeably from 12.9807% to 13.0650%.
Economists argue that while these increases appear modest on the surface, they carry important implications. Higher rates mean the government is paying more to roll over existing debt and to finance new spending.
Over time, this can inflate interest costs and contribute to faster debt accumulation, especially if elevated borrowing persists alongside tight fiscal space.
As it stands now, the market continues to show no shortage of buyers for government securities. But the combination of repeated oversubscriptions, rising acceptance amounts, and creeping yields are clear indication that the government is leaning heavily on the short-term debt market, and each successful auction, while reassuring, comes at a growing price.
Meanwhile, the government plans to raise another relatively ambitious target of GHC7.0 billion in its upcoming auction this week.
