For the first time in years, Ghana’s treasury bill investors are seeing their returns rise above the rate of inflation, a quiet but significant economic turning point.
After months of watching their real returns get eroded by inflation, investors in short-term government securities can now breathe a little easier. Ghana’s headline inflation dropped sharply to 13.7% in June, the lowest since December 2021. At the same time, interest rates on treasury bills, though on a declining trajectory, remain firmly above inflation.
According to the latest auction data from the Bank of Ghana, the 91-day bill closed at 14.69%, while the 182-day and 364-day bills settled at 15.25% and 15.65%, respectively. These figures, modest as they may appear, now yield positive real returns, meaning that for the first time in many quarters, inflation is no longer gobbling up investor gains.
A Break in the Clouds
For weeks, the government has struggled to meet its domestic borrowing targets. The latest T-bill auction, held on June 30, ended in a GH₵ 300 million shortfall, the fifth consecutive undersubscription on the market. While the government targeted GH₵ 3.9 billion, investor bids came in at GH₵ 3.6 billion. Even then, government only accepted GH₵ 3.3 billion, rejecting a portion of high-priced bids to maintain its push toward lower interest rates.
The drop in inflation has thus arrived at a critical moment. With the macroeconomic environment showing signs of stability, policymakers have more leverage to recalibrate.
The Central Bank’s Long Game
The Bank of Ghana has been cautious in its approach. Although the policy rate remains at 28%, the Bank has nudged market lending conditions toward easing. The Ghana Reference Rate, a benchmark for lending, has dropped from 29.3% in December 2024 to 23.9% in April 2025, suggesting a softening in credit conditions.
But behind the scenes, a more ambitious goal is in motion.
Earlier this year, Governor Johnson Pandit Asiama publicly declared his intention to drive lending rates below 10% by the end of his tenure. It is a bold promise, one that rests heavily on the sustainability of disinflation and fiscal discipline. For now, the economy appears to be cooperating.
Between Patience and Policy
Still, challenges remain. Investor appetite for T-bills has waned in recent weeks, largely due to falling interest rates and shifting risk preferences. The government’s attempt to keep rates low, while admirable, risks driving buyers away, unless confidence in macroeconomic management holds strong.
But the silver lining is this: with inflation now below all short-term interest rates, real returns are back in positive territory. And for investors, that changes the calculus.
In the coming week, the government plans to raise GH₵ 3.4 billion on the T-bill market, slightly lower than the previous target. Whether the undersubscription streak breaks or continues will likely depend on whether the positive real return holds and how confident investors remain in the government’s economic management.
A Window of Opportunity
The current alignment, falling inflation, modestly high interest rates, and deliberate rate rejection, is rare. It gives the government a narrow but important window to reset its debt strategy and signal fiscal credibility. For a country that has battled high inflation, currency pressure, and fiscal slippage, this moment matters.
Inflation is no longer eating returns. The government can now think beyond just plugging funding gaps, and start thinking about shaping a future of lower, sustainable rates.
