Ghana’s government raised GHS 120.2 billion from the domestic Treasury bill market during the first four months of 2026. Authorities implemented this strategy to capitalise on strong market liquidity and falling interest rates. This aggressive borrowing in the early part of the year aimed to manage borrowing costs effectively.
Total investor bids reached approximately GHS 181.5 billion, indicating significant demand for short-term government securities. The government strategically rejected higher-cost bids as market rates decreased. This approach highlights a deliberate effort to lower the cost of servicing public debt.
This borrowing strategy fits into Ghana’s broader economic management efforts following its domestic debt restructuring programme. Short-term government securities have become a crucial funding source. Confidence is gradually rebuilding in the market for longer-term domestic debt instruments.
According to auction data from the Bank of Ghana, investor interest varied significantly over the period. Early in the year, Treasury bill auctions were heavily oversubscribed, especially from January to mid-March. Investors sought attractive yields and relatively low-risk government instruments during a time of improving economic sentiment.
Demand peaked in mid-February, with bids reaching GHS 22.67 billion against a target of GHS 6.42 billion. Experts say the government strategically borrowed heavily during this quarter when demand was high and rates were favourable. This period allowed the government to secure substantial funds efficiently.
However, market momentum slowed from late March into April, with yields compressing. The market then experienced six consecutive undersubscribed auctions. This suggested growing investor caution as returns on these instruments declined.
One notable undersubscribed auction, Tender 2002, saw bids of GHS 5.31 billion fall short of the government’s GHS 7.57 billion target. This shift showed investors were becoming less willing to lend money to the government at lower rates.
Demand for longer-duration securities, such as the 364-day bill, also declined. In January, the 364-day bill attracted over GHS 15 billion in bids. By the end of April, investor interest in this security fell to about GHS 3.12 billion. Investors were less inclined to commit funds for longer periods at reduced yields.
Conversely, shorter-dated securities regained favour. The 91-day bill drew the strongest demand during the final Treasury bill auction in April. It attracted GHS 2.8 billion in bids, with nearly GHS 2.7 billion accepted. This illustrates a market preference for shorter-term commitments.
The yield decline has been significant. At the beginning of 2026, the 91-day Treasury bill yielded about 11.12 per cent. The 364-day instrument stood at 12.93 per cent. By the end of April, the 91-day yield dropped to 4.92 per cent, and the 364-day bill eased to 10.20 per cent. This sharp reduction made Treasury securities less attractive, especially for investors seeking higher real returns after accounting for inflation.
The government appears to have adapted its strategy as conditions changed. As liquidity evolved and rates dropped, authorities became more selective in accepting bids. This disciplined approach aimed to reduce debt-servicing costs instead of meeting all issuance targets. Future auctions will indicate how the government balances funding needs with maintaining attractive yields for investors. Investors will watch for signs of renewed interest in longer-term government debt as economic conditions stabilise and inflation is brought under control.