The government has borrowed GHC 120bn from the Treasury bill market in the first quarter of 2026 (January to April) after investors offered GH¢ 181.5 billion, as stated in the Bank of Ghana’s (BoG) official auction data released on Tuesday, May 12.

Government borrowing the GHC 120bn instead of the total amount offered reflects a measured borrowing strategy, with the Treasury balancing financing needs against the need to contain borrowing costs amid evolving liquidity conditions.

According to the data, the T-bill market recorded two different phases, with the first phase, that is, January to mid-March, seeing strong investor demand, which drove 11 consecutive oversubscribed auctions.

The highest demand came in mid-February, when investors offered about GH¢22.67 billion even though the government only planned to borrow GH¢6.42 billion.

However, demand weakened from late March through April as yields compressed sharply. The market recorded six consecutive undersubscribed auctions, most notably Tender 2002, where bids tendered of GHS5.31bn fell short of the GHS7.57bn target by nearly 30%.

Consequently, investors changed the kind of T-bills they were buying. Many shifted their focus to the 364-day bill. In particular, a record GH¢15.18 billion was offered by investors in January for the one-year bill.

However, by April, investors' preference had dropped by 79.4%, marking a monetary drop in GH¢3.12 billion interest for the 364‑day bill as they had lost interest in locking up their money for a whole year when returns were lower.

In the last Treasury bill auction in April, most investors preferred the short-term 91-day bill. It received GH¢2.8 billion in bids, and the government accepted almost all of it, GH¢2.7 billion.

The 182-day bill received GH¢717.6 million in bids, with GH¢664.4 million accepted, while the 364-day bill attracted GH¢960.1 million, but the government accepted only GH¢522.5 million.

In the final auction of April, demand was concentrated in the 91-day bill, which attracted GHS2.8billion in bids, of which GHS2.7 billion was accepted. The 182-day bill recorded GHS717.6million in bids, of which GHS664.4million was accepted, while the 364-day bill attracted GHS960.1million, of which only GHS522.5 million was accepted.

Interest Rates and Yield MovementsThe big drop in interest rates/returns was one of the main reasons people changed how much they wanted to invest in T-bills.Earlier in the year, investors could earn about 11.12% on a 3-month T-bill and 12.93% on a 1-year T-bill. By late April, the returns had dropped a lot: the 3-month T-bill paid only 4.92%, and the 1-year T-bill paid 10.20%.Because the returns became lower, T-bills were no longer as appealing to investors, especially toward the end of the three months.

The data indicate that the government leveraged strong liquidity conditions in the first quarter to front-load borrowing at relatively higher rates. As yields declined and demand softened, the Treasury adopted a more disciplined issuance strategy, frequently accepting bids below the total bids submitted.

The sizeable bid rejections in April point to a clear cost-management strategy, with the Treasury prioritising lower borrowing costs over meeting full auction targets.

Meanwhile, in 2025, banks invested more in treasury bills than in 2024. This is according to the Bank of Ghana's January 2026 Monetary Policy Report.

According to the BoG, its share increased from 40.3% in December 2024 to 62.3% in December 2025, whereas the share of long-term securities declined from 59.3% in December 2024 to 37.2% in December 2025, marking a 37.3% year-on-year decline.

This was in line with the growth moderation recorded during the reference period. The report also stressed that the share of equity investments remained negligible but increased marginally from 0.4% percent in December 2024 to 0.5% in December 2025.

Meanwhile, the share of deposits in banks’ liabilities and shareholders’ funds decreased to 72.8% in December 2025 from 75.1% in December 2024, reflecting the slowdown in deposit growth in 2025.

The increase in borrowings, however, translated into an increased share of 8.5% in December 2025 from 7.6% in December 2024.

The proportion of shareholders’ funds in banks’ total funding also improved to 13.1% in December 2025 from 10.8% a year earlier, while the share of other liabilities declined from 6.3% to 5.4% during the same comparative period.

Investor interest and confidence in government treasuries remain high as the treasury bill auction exceeds the target by over 60%.

In auction results posted by the Bank of Ghana, the government accepted GH¢12.8 billion in bids at the latest auction, above its GH¢9.8 billion target, although investors submitted bids worth GH¢15.9 billion.

The reports also show that the majority of investors preferred the 364-day (one-year) treasury bill, for which they offered about GH¢7.4 billion, making up nearly half of all the money investors offered.

Out of this amount, the government accepted just over GH¢5.0 billion.