T-bill Auction Undersubscribed: Ghana’s Government Misses Target

Demand for Treasury bills remained weak last week. The latest primary auction recorded a significant shortfall. Investors tendered a total of GH¢3.5 billion. In fact, this was across the 91-, 182-, and 364-day bills. Of the total amount, the Treasury accepted GH¢3.39 billion. This fell short of the GH¢6.72 billion target. Consequently, the T-bill auction undersubscribed by 50 percent. This is a concerning development for the financial market.

A breakdown of the bids indicates low demand across the board. For instance, the 91-day bill saw GH¢2.01 billion accepted. However, investors tendered GH¢2.05 billion. The 182-day bill saw a GH¢1.12 billion acceptance from a GH¢1.14 billion submission. Furthermore, the 364-day bill saw only GH¢194 million accepted. This was from GH¢321 million in bids. The continuous low uptake raises deeper questions. Analysts are questioning what is driving this decline in investor appetite. Some link the persistent undersubscription to weak demand. Others point to other attractive investment instruments. This recent T-bill auction undersubscribed event confirms a growing trend.

Yields on all three maturities edged down slightly. The 91-day yield slipped 9 basis points. It went from 10.41 percent to 10.32 percent. The 182-day bill’s yield dropped 1 basis point. It moved to 12.37 percent. The 364-day bill also fell 1 basis point. It slipped to 12.99 percent. Looking ahead, the government will target GH¢3.78 billion. The government must now find other ways to fund its operations. This undersubscription makes government borrowing more challenging. It also indicates a potential loss of investor confidence.

Source: Citinewsroom. Author: Nerteley Nettey. Date: September 1, 2025.