Ghana’s short–term debt market has stumbled again, deepening concerns over the government’s liquidity outlook after recording its sixth consecutive undersubscription in last week’s Treasury bill (T-bills) auction.
Despite offering higher interest rates to lure investors, the government raised GH¢4.84 billion out of its GH¢6.42 billion target.
This left a gaping GH¢1.46 billion shortfall, equivalent to 22.8%.
According to the auction results published by the Bank of Ghana, the latest numbers show that investor appetite remains weak even as returns inch upward.
The 91-day bill, the most traded instrument, climbed from 11.0275% to 11.1353%, while the 182-day bill also moved from 12.6606% to 12.6805%.
Only the 364-day bill slipped slightly from 13.0817% to 13.0618%, yet the rate increases did little to shift investor behaviour.
A breakdown of bids shows that the 91-day amassed a total of GH¢3.9 billion. The 182-day instrument also amassed a total of GH¢749.25 million, while the 364-day instrument accrued a total of GH¢266.83 million
In total, investors submitted GH¢4.95 billion, but the government accepted GH¢4.84 billion, rejecting GH¢115.91 million.
Analysts say the persistent undersubscriptions point to tightening liquidity within the financial system, as well as competing investment alternatives, particularly the Bank of Ghana’s own bills, which continue to offer more attractive yields.
There is also lingering caution among investors who remain unconvinced that the current rate of return adequately compensates for inflation, currency risks, and wider economic uncertainties.
The continued shortfalls pose a worrying challenge for government financing, especially at a time when essential programmes and recurrent expenditure rely heavily on weekly T-bill mobilization.
This means that cash flow pressures may intensify, forcing the government to either borrow at higher costs or delay payments.
Moreover, interest expenses could keep rising, as the state is pushed to offer even higher yields to draw funds.
For a government that relies on T-bills to meet urgent obligations, including salaries, maturing debts, and operational costs, the repeated undersubscriptions signal a tightening noose.
If the trend persists, the government may be compelled to re-adjust borrowing strategies and increase yields further, or scale back certain spending plans
Some market watchers believe that continuous undersubscription after the 2026 Budget presentation sends a signal that investor confidence in the short-term debt market remains fragile, and higher rates alone are not fixing the problem.
Meanwhile, the government plans to raise a more ambitious target of GHC2.9 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.
