Ghana’s Treasury market (T-bills) is struggling to find its footing, dipping for the fifth week in a row as investor demand for short-term government securities continues to weaken.
The fifth undersubscription is coming even after the presentation of the 2026 Budget, which some analysts hoped would inspire confidence in the market.
Even another round of interest rate hikes meant to lure investors back could not do the magic.
In the latest auction results published by the Bank of Ghana, the government targeted GHC5.68 billion but received only GHC3.95 billion, resulting in a shortfall of GHC1.73 billion, or 30.44% undersubscription.
Of the bids received, GHC3.83 billion was accepted, leaving GHC116 million rejected.
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This persistent string of undersubscriptions, now stretching into its fifth consecutive week, signals mounting caution among investors despite the government offering higher yields across all maturities.
The breakdown of bids shows the 91-day bill once again absorbing the bulk of investor interest at GHC3.95 billion, followed by GHC613.27 million for the 182-day and GHC257.13 million for the 364-day instruments.
To boost demand, the government raised rates on all three maturities as follows;
91-day: 10.9277% → 11.0275%
182-day: 12.6114% → 12.6606%
364-day: 13.0184% → 13.0817%
Ordinarily, rising yields make T-bills more attractive. But analysts explain that the muted investor response suggests liquidity constraints, competing investment alternatives, or lingering concerns about government financing conditions, even after the budget outlined a more ambitious fiscal path for 2026.
Repeated shortfalls in T-bill auctions mean the government is consistently raising far less cash than it needs for weekly financing. Treasury bills fund essential short-term obligations such as wage payments, statutory transfers, debt servicing, and operational costs across ministries etc.
A fifth straight dip risks creating knock-on pressures on government spending, forcing tough choices either to redirect funds from other budget lines, delay payments, or borrow at even higher costs if market conditions tighten further.
On the other hand, the higher yields, meant to attract investors, come with a price. As interest costs rise, the government risks increasing its already sizeable domestic debt servicing bill, tightening fiscal space in a budget year already framed as one of consolidation and limited spending flexibility.
Analysts warn that if undersubscriptions persist while rates keep climbing, the government could find itself paying more for less, stuck in a cycle of higher borrowing costs and insufficient liquidity.
With the government set to return to the market again next week, the big question is whether confidence will rebound, or whether this five-week slide is becoming a worrying new normal for Ghana’s short-term borrowing strategy.
Meanwhile, the government plans to raise a more ambitious target of GHC6.4 billion in its upcoming auction this week. Will there be a rebound, or will the nosedive continue?
Market watchers are closely monitoring the market to see if the shortfall could be reversed.
