The Mahama administration, for the first time this year, has fallen short of its Treasury bill target, missing it by GH¢2.8 billion.
The Bank of Ghana’s (BoG) data shows that the government intended to raise GH¢6.14 billion from short-term instruments but received bids totaling GH¢3.32 billion, representing a 45% undersubscription.
A breakdown of the auction results reveals that out of GH¢3.6 billion tendered for the 91-day Treasury bill, GH¢2.33 billion was accepted. The 182-day bill attracted GH¢741 million in bids, with GH¢574 million accepted. For the 364-day bill, GH¢622 million was tendered, but only GH¢406 million was accepted.
The Institute of Economic Research and Public Policy, IERPP, on Wednesday, March 5, 2025, in Accra, in a press release, questioned the rationale behind government’s functionaries celebrating the auctioning of treasury bills between 19% and 22%.
The think tank found it extremely strange that government was touting such a situation as an achievement since there would be little or no value for those who would invest in these T-bills.
“This clearly portrays the lack of understanding of economics by some individuals in government. They make posts to the effect that government has auctioned T-bills for 19% and 22%, and for that matter, the Mahama government should be praised. This does not call for any jubilation. Assuming the end of year inflation target is 19%, this means a zero or -3% real value for investment” the statement read, in part.
“Inflation currently sits around 23%, lending rate, primarily driven by the Monetary Policy Rate (MPR) sits between 34.5 and 35.5%. This implies that holding all other factors constant, the average Ghanaian who invests in T-bills given the current rate is losing money in real terms” IERPP further explained at the time.
“That is to even assume that such people are not borrowing to invest. Should the later be the case, then the average Ghanaian investor is in for trouble. We should brace ourselves for more non-performing loans (NPR)” the release further stated.
IERPP cautioned the government against manufacturing economic indicators just to look good in the eyes of the public as well as the international community, a situation that could affect Ghana’s credibility amongst global financial institutions like the IMF, the World Bank, etc.
The policy think tank stands vindicated today as it cautioned the government against the likelihood of investors fleeing from buying treasury bills at rates that would maake them worse off.