The Government raised about GH¢120.2 billion from the Treasury bill market between January and April 2026, despite investors offering a much larger GH¢181.5 billion during the period.
The gap between bids submitted and amounts accepted highlights a deliberate strategy by the Treasury to contain borrowing costs as interest rates declined steadily across the market.
Strong Demand Early in the Year
Data from the Bank of Ghana showed that investor appetite for Treasury bills remained exceptionally strong during the first quarter of the year.
From January to mid-March, the market recorded 11 consecutive oversubscribed auctions, with investors consistently offering far more than the government initially targeted.
Demand peaked in mid-February when investors submitted GH¢22.67 billion in bids against a target of GH¢6.42 billion, reflecting strong liquidity conditions in the financial sector and continued appetite for short-term government securities.
Investor Interest Weakens in April
The momentum, however, slowed significantly from late March into April as Treasury bill yields declined sharply.
The market recorded six straight undersubscribed auctions during the period, signalling weakening investor interest at lower rates.
One of the weakest auctions occurred during Tender 2002, where total bids of GH¢5.31 billion fell well short of the government’s GH¢7.57 billion target.
Analysts say the decline in participation reflected investor reluctance to lock funds into lower-yielding instruments, particularly at the longer end of the yield curve.
Shift in Investor Preference
The data also showed changing investor behaviour across the various Treasury bill tenors.
At the beginning of the year, the 364-day bill attracted strong interest, recording bids of about GH¢15.18 billion in January as investors sought to lock in higher returns for longer periods.
However, demand for the same instrument weakened considerably by the end of April, dropping to roughly GH¢3.12 billion as yields compressed.
In the final auction of April, investors largely favoured the shorter-dated 91-day bill.
The government received GH¢2.8 billion in bids for the 91-day instrument and accepted GH¢2.7 billion. The 182-day bill attracted GH¢717.6 million in bids, with GH¢664.4 million accepted.
Meanwhile, the 364-day bill received GH¢960.1 million in bids, but the Treasury accepted only GH¢522.5 million.
Yields Drop Sharply
Treasury bill rates declined significantly over the four months.
The 91-day bill opened the year with an average yield of 11.12 per cent but dropped sharply to 4.92 per cent by the end of April.
Similarly, the 364-day bill fell from 12.93 per cent at the start of the year to 10.20 per cent by the close of April.
The sharp fall in yields reduced the attractiveness of Treasury securities, especially for investors seeking higher returns in a declining interest rate environment.
Treasury Focused on Lower Borrowing Costs
The pattern of bid rejections in April suggests the government deliberately tightened its borrowing strategy to avoid taking funds at rates it considered expensive relative to prevailing market conditions.
Rather than fully meeting auction targets, the Treasury frequently accepted lower amounts, signalling a strong focus on reducing debt servicing costs.
The development also indicates that the government took advantage of strong liquidity conditions earlier in the year to secure substantial financing before rates declined further.
With investor demand now moderating, market watchers expect Treasury bill auctions in the coming months to remain closely tied to movements in inflation, monetary policy decisions, and overall liquidity conditions in the banking sector.
By: Janice Opoku-Agyemang
