Government Exceeds Auction Target by GHS 466m, Pushing 364-day Bill Yields to 33%

In the latest auction of treasury bills with maturities of 91, 182, and 364 days, the Government of Ghana has exceeded its initial target of raising GHS 2.10 billion.

During the auction of these short-term securities, the Government surpassed its target by a notable GHS 466 million, successfully raising GHS 2.57 billion from the debt market.

The bids for the 91-day, 182-day, and 364-day T-Bills amounted to GHS 2,170 million, GHS 375 million, and GHS 80 million, respectively. The Government accepted bids worth GHS 2,155 million, GHS 353 million, and GHS 67 million for the 91-day, 182-day, and 364-day T-Bills, respectively.

Interest rates for these T-Bills were set at 29.1%, 31.2%, and 33.0% for the 91-day, 182-day, and 364-day maturities, respectively. On average, the Government’s interest cost on T-Bills currently stands at 31.1%.

In the previous week’s auction, a similar trend was observed as the Government exceeded its target by GHS 510 million, ultimately raising GHS 3.09 billion from the debt market.

Despite the high T-Bill rates, real returns on these short-term debt instruments remain negative, as the rates fall below the prevailing inflation rate of 40.1%.

Meanwhile, the Bank of Ghana has reported a significant increase in Ghana’s public debt during the second quarter of 2023, rising by approximately ¢6.3 billion. This surge has pushed the nation’s total debt to ¢575.5 billion, equivalent to around $52.3 billion.

This figure represents a substantial 71.9% of Ghana’s Gross Domestic Product (GDP).

Further analysis of Ghana’s public debt reveals that the external component reached $29.9 billion (¢328.6 billion) in June 2023, surpassing the April 2023 figure of $29.3 billion (¢321.3 billion).

In contrast, the domestic debt amounted to ¢246.9 billion at the end of June 2023, making up approximately 30.8% of the nation’s GDP.

Source: Ghana Business