Government achieves 11% oversubscription of T-bills sale, but interest costs surge

Government achieved a marginal oversubscription of its Treasury bills sale, according to results published by the Bank of Ghana.

The oversubscription of 11.64% was however realised at higher interest rates.

According to the results, government secured a total of ¢1.088 billion, against a target of ¢974.51 from the sale of the short-term instruments.

Bids tendered in were estimated at ¢1.088 billion, which the government accepted all.

Some market watchers may attribute the slight oversubscription of the financial instruments to a reduction in the targeted amount.

But despite the oversubscription of the targeted amount, the government will spend more to repay the borrowed funds at maturity.

Again, the increased appetite for borrowing by the government is crowding out the private sector from access to financing.

Whilst the 91-day T-bills went up by 0.43% to 31.39%, that of the 182-day T-bill also hit 32.23%, from 32 % the previous week.

The 364-day however sold for 32.06%, lower than the 6-months bill.

In 2022, the government is expected to spend ¢42 billion of tax revenue as interest payments.

Securities	Bids Tendered (GH¢)	Bids Accepted (GH¢)
91 Day Bill	830.33 million	830.33
182 Day Bill	94.34 million	94.34 million
364 Day Bill	49.84	49.84
Total	1.088	1.088
Target	974.51	974.51

Source: Ghana News