Investor Confidence Rebounds as Government Records Oversubscription in Treasury Bills Auction

 

Investor confidence in Ghana’s short-term debt market is showing signs of recovery, as the government recorded a marginal oversubscription in its latest treasury bills (T-bills) auction. The auction, held in the second week of April 2025, saw the government raise GH¢6.74 billion—exceeding its target of GH¢6.68 billion.

This positive development comes after three consecutive weeks of underperformance, during which the government failed to meet its T-bill auction targets. The rebound not only highlights renewed investor interest but also indicates a slight improvement in market sentiment toward Ghana’s debt instruments.

Alongside the increased subscription, yields on the 91-day, 182-day, and 364-day treasury bills saw modest declines, indicating reduced pressure on interest rates. Specifically, the 91-day bill dropped by 20 basis points to 15.45%, the 182-day bill declined by 29 basis points to 16.21%, and the 364-day bill fell by 18 basis points to 18.65%.

Analysts from Databank Research noted that the improved performance and marginal yield reductions are signs of growing alignment between investor expectations and government pricing. They stated:

The Treasury’s higher acceptance rate signals improving alignment between investor demand and yield expectations. This shift may reflect market confidence in the current rate levels.

According to the report, the government is expected to face weekly maturities averaging GH¢6.0 billion in the coming weeks. If the Treasury continues to issue bills at near-target levels, it could sustain funding needs without exerting upward pressure on yields—a situation that would benefit both the government and investors.

Last week, the Treasury accepted 98% of investor bids—GH¢6.74 billion out of GH¢6.87 billion tendered—demonstrating its increased appetite for funds. The amount raised not only exceeded the auction target but also covered the GH¢6.43 billion in upcoming maturities, ensuring stability in the government’s short-term debt operations.

Market observers believe the current dynamics could lead to further yield compression in the near term, provided investor confidence remains steady and the Treasury continues to manage its borrowing strategy prudently.

As the government strengthens its fiscal position and aligns market expectations with its funding needs, the rebound in investor interest marks a positive step toward stabilizing Ghana’s domestic debt market.