On Friday, May 26, 2023, Government faced disappointment as it failed to meet its target of GHS 3,431 million in the auction of its 91, 182, and 364-day treasury bills. The Bank of Ghana (BoG) released the auction results report, revealing that bids tendered by primary dealers for the 91-day T-Bills amounted to GHS 2,034 million, with the government accepting all bids received.
Similarly, bids for the 182 and 364-day T-Bills reached GHS 874 million and GHS 274 million, respectively, with the government once again accepting all the bids. In total, the government was able to mobilize GHS 3,182 million from the auction, falling short of its target by GHS 249 million.
The undersubscribed Treasury bills auction underscores the ongoing challenges faced by the Ghanaian economy. It highlights the need for the government to implement measures aimed at improving the economy’s performance and addressing the current issues it faces.
It is imperative for the government to assess the underlying reasons for the shortfall and take appropriate actions to restore confidence and attract investor participation in future auctions. A thorough evaluation of market conditions, investor sentiment, and the broader economic landscape will be crucial in devising effective strategies to meet funding requirements.
Looking ahead, the government is set to make another attempt to raise funds from the T-Bills market. On Friday, June 2, 2023, it will seek to raise GHS 2,082 million. The outcome of this upcoming auction will be closely monitored by market participants and economic observers, as it will provide further insights into the state of the economy and investor confidence.
In order to enhance investor interest and achieve a successful auction, the government may consider implementing measures to address the concerns that led to the recent under-subscription. This could include providing attractive yields, ensuring transparency and stability in the auction process, and communicating a clear roadmap for economic reforms and fiscal discipline.
Overall, the government’s ability to meet its funding targets through Treasury bills auctions will play a significant role in managing the country’s fiscal requirements, debt sustainability, and overall economic stability. Continued efforts to strengthen the economy and restore investor confidence are essential for navigating the current challenges and setting a course for sustainable growth.