By Toma Imirhe
Even ahead of last week’s decision by the Bank of Ghana’s Monetary Policy Committee not to cut the benchmark Monetary Policy Rate any further from the 14% set in March, investor appetite for Government of Ghana treasury bills appears to have rebounded sharply over the past few weeks. With treasury bill yields unlikely to fall further over the coming weeks, this is putting paid to the erstwhile stretch of weak auctions that had raised concerns over the state’s short-term financing programme and the sustainability of declining yields in the domestic debt market.
Auction results released by the Bank of Ghana show that the May 8 and May 15, 2026 auctions were both oversubscribed, marking a turnaround from the under-subscriptions and sizeable bid rejections that characterised much of April.
According to auction data, the May 8 sale recorded total bids of nearly GH¢7.8 billion against a target of about GHc4.3 billion, representing an oversubscription of roughly 80%. The 91-day bill dominated demand with GHc5.72 billion in bids, of which GHc4.37 billion was accepted. The 182-day bill attracted GHc650 million in bids, with GHc570 million accepted, while the 364-day bill received GHc1.46 billion worth of bids, out of which GHc1.14 billion was taken up.
The subsequent May 15 auction sustained the renewed momentum, with investors continuing to pile into the short end of the yield curve despite moderating interest rates. The total amount tendered was GHc5.80 billion against a target of GHc4.30 billion resulting in a 34.8% oversubscription, with the government accepting GHc5.48 billion worth of bids. For 91 day bills GHc3.83 billion was tendered and GHc3.65 billion was accepted. For 182 day bills, GHc709.83 million was tendered and GHc671.72 million was accepted. For 364 day bills, GHc1.26 billion was tendered, and GHc1.15 billion was accepted.
Analysts say the reversal reflects a combination of improving macroeconomic sentiment, excess banking sector liquidity and rising caution among institutional investors regarding longer-dated government securities being traded on the Ghana Fixed Income Market’s secondary market.
“The market is gradually regaining confidence in government paper after the uncertainty created by the domestic debt restructuring exercise,” said a fixed income dealer at a leading Accra-based investment bank last week. “Most investors are still unwilling to lock funds into long-dated bonds, so treasury bills remain the preferred safe haven.”
The dominance of the 91-day instrument remains striking. In both the May 8 and 15 auctions, the shortest tenor accounted for well over 70 percent of total bids submitted. Analysts attribute this preference to lingering investor caution after the Domestic Debt Exchange Programme (DDEP), under which holders of medium and long-term bonds suffered maturity extensions and coupon reductions.
Although treasury bills were exempted from the DDEP, investors remain wary of duration risk and prefer instruments that mature quickly and can be rolled over frequently.
“The preference for the short end is rational,” noted an Accra-based treasury manager at the weekend. “Investors want liquidity, flexibility and minimal exposure to future policy uncertainty. The 91-day bill offers all three.”
Recent auction data show yields stabilising at much lower levels than those prevailing earlier in the year.
The rally in treasury bill demand follows Ghana’s improving macroeconomic outlook under the International Monetary Fund-supported reform programme that the country exited two weekends ago. The recent upgrade of Ghana’s sovereign credit rating by Fitch Ratings to B with a positive outlook has further boosted investor confidence in government securities.
Finance Minister Cassiel Ato Forson has repeatedly argued that the government’s fiscal consolidation programme is beginning to yield results, citing stronger revenue mobilisation, the sharp decline in inflation and improved exchange rates.
At the same time, liquidity conditions within the banking sector remain elevated. Many banks and institutional investors have accumulated sizeable cedi balances amid relatively weak private sector credit demand for viable uses, forcing them back into government securities despite lower yields.
This excess liquidity partly explains why government has increasingly been able to reject bids aggressively in recent months while still meeting its financing requirements. Between January and April 2026, government reportedly mobilised about GH¢120.2 billion from the treasury bill market against bids worth more than GH¢181 billion submitted by investors.
Indeed, some analysts argue that the earlier under-subscriptions witnessed in April were not entirely demand-driven but also reflected strategic bid rejections by the Treasury as it sought to force yields lower.
“The government deliberately became selective about the rates it was willing to accept,” says one market analyst. “That initially discouraged some investors, but the market has now adjusted to the new yield environment.”
The current structure of demand also highlights persistent segmentation within Ghana’s domestic debt market. While treasury bills continue attracting strong interest, appetite for medium and long-term bonds remains subdued, forcing government to rely heavily on short-term borrowing.
That strategy carries refinancing risks because large volumes of debt mature every few months. However, analysts say the Treasury currently prefers the flexibility of short-term financing while waiting for confidence in the long end of the market to recover.
Over the next two to three months, market watchers expect treasury bill issuance volumes to remain elevated as government continues refinancing maturing obligations and funding budget operations. However, most analysts forecast that oversubscriptions are likely to persist, especially for the 91-day tenor.
Short-term rates could trend gradually lower if inflation continues easing and the cedi remains relatively stable, although neither of those are a given, due to the global price shocks currently being experienced by Ghana that are emanating from unresolved tensions in the Persian Gulf – and which have persuaded the BoG to pause the monetary easing it began in July 2025..
Current market expectations suggest the 91-day bill’s yield could still possibly decline marginally over the next couple of months if oversubscriptions persist, although the 182-day and 364-day instruments may remain relatively sticky because investors will continue demanding a premium for longer maturities.
The outlook will nevertheless depend heavily on fiscal discipline by government and monetary policy decisions by the Bank of Ghana. Any renewed exchange rate pressure, acceleration in inflation or deterioration in government financing conditions could quickly reverse the recent decline in yields.
For now, however, Ghana’s treasury bill market appears to have regained momentum after several uncertain weeks, offering government a critical source of domestic financing having exited its three-year IMF programme
