GoG seeks to break undersubscription streak with GHC4.35bn T-Bill auction

The Government of Ghana is returning to the domestic money market on May 8, 2026, with plans to raise GHC4.349 billion through its weekly Treasury bill auction.

The auction comes at a challenging time for the Treasury as authorities continue to grapple with declining investor appetite for short-term government securities.

According to market analysts, the upcoming sale represents a major test for government financing efforts after seven consecutive weeks of undersubscription in the Treasury bill market, raising concerns about the government’s ability to consistently meet its short-term borrowing targets.

The auction will include the standard 91-day, 182-day, and 364-day Treasury bills, which remain key instruments used by government to finance operations and refinance maturing debt obligations.

Financial analysts believe the recent slowdown in demand may be linked to tightening liquidity conditions within Ghana’s banking sector, reducing the amount of available funds for investment in government securities.

Another contributing factor is the gradual decline in the Ghana Reference Rate (GRR), which reportedly dropped to 10.03% this month. The falling benchmark rate may be signaling to investors that Treasury bill yields have peaked, reducing incentives for aggressive participation in the market.

Investors are also believed to be shifting attention toward alternative asset classes as Ghana’s broader macroeconomic conditions begin showing signs of gradual stabilization following recent economic challenges.

Despite the weak demand trend, the Bank of Ghana remains optimistic that the government’s GHC4.349 billion target will attract sufficient investor participation.

The funds raised are expected to be used primarily for rolling over maturing debts and supporting ongoing government expenditure requirements.

However, analysts warn that if the Treasury experiences an eighth consecutive week of undersubscription, authorities may be compelled to increase Treasury bill interest rates to attract investors.

Such a move could significantly increase the government’s borrowing costs and add further pressure to Ghana’s public debt burden.

The performance of tomorrow’s auction is therefore expected to be closely monitored by investors, financial institutions, and policymakers as an indicator of confidence within Ghana’s domestic debt market.