Ghana's Treasury Bill Auctions Miss Target for Seventh Week as Investors Demand Higher Yields

Key facts

• Government missed its GH¢4.89 billion target by 10% in the latest auction, accepting only GH¢4.0 billion.
• The 91-day bill attracted GH¢1.89 billion in bids, with GH¢1.88 billion accepted, yield unchanged at 4.92%.
• The 182-day bill yield rose to 6.97% from 6.96%, while the 364-day bill yield increased 7 basis points to 10.19%.
• Total bids for government securities in Q1 2026 reached GH¢164.1 billion, but only GH¢104.1 billion was accepted.
• Bank of Ghana mopped up GH¢389.1 billion in liquidity in Q1 2026, up from GH¢46.4 billion a year earlier.
• Secondary bond trading volumes fell sharply to GH¢599.24 million from GH¢1.69 billion in the latest week.
• Government bond yields fell from 22-25% in early 2025 to 10-13% by March 2026.

A Seventh Consecutive Miss

The government of Ghana has failed to meet its treasury bills target for the seventh week in a row, as investors increasingly resist the low yields that have resulted from months of policy-driven yield suppression. According to the latest auction results from the Bank of Ghana, total bids amounted to GH¢4.48 billion against a target of GH¢4.89 billion, a shortfall of roughly 10 percent. The Treasury accepted about GH¢4.0 billion of the bids, leaving a gap that raises concerns about the government's ability to finance its short-term obligations. The persistent undersubscription marks a departure from earlier in the year, when strong liquidity and aggressive bid rejections allowed the government to compress yields while still meeting its financing needs. Now, the market is showing clear signs of investor resistance, with demand softening even as yields begin to rise.

Mixed Yields Reflect Selective Investor Behavior

Yields in the latest auction were mixed, with the 91-day bill remaining unchanged at 4.92 percent and the 364-day bill declining marginally to 10.12 percent. In contrast, the 182-day bill yield rose by five basis points to 6.96 percent, a move that analysts attribute to selective investor positioning rather than broad-based demand. Apakan Securities noted in its commentary that yields were mixed, indicating selective investor behavior across the curve. The 91-day bill remained the most subscribed instrument, attracting GH¢1.89 billion in bids, of which GH¢1.88 billion were accepted. The 364-day bill saw bids of about GH¢1.8 billion, with GH¢1.7 billion accepted. For the 182-day bill, all GH¢764.25 million in bids were accepted.

Investors Push Back Against Yield Suppression

The recent auction outcomes reinforce a trend observed throughout April, where demand has softened even as yields began to rise. In the prior week, total bids of GH¢4.49 billion fell short of a GH¢4.89 billion target, an eight percent undersubscription, yet the Treasury accepted GH¢4.09 billion to meet maturities. At that time, yields extended their upward movement, with the 91-day bill rising to 4.95 percent, the 182-day to 6.91 percent, and the 364-day to 10.13 percent. The persistence of weak demand despite higher yields suggests that investor appetite is becoming more price-sensitive. This evolving behavior comes against the backdrop of a liquidity-driven market structure that has defined the domestic fixed income environment in 2026. The Bank of Ghana has significantly expanded liquidity absorption operations, mopping up GH¢389.1 billion in the first quarter alone, compared with GH¢46.4 billion a year earlier. Monthly sterilisation volumes accelerated sharply, exceeding GH¢100 billion in each of the year's first three months.

The Policy Mix and Its Unintended Consequences

The scale of these operations reflects elevated excess liquidity in the financial system, partly generated by the government's strategy of rejecting higher-yield bids to maintain lower borrowing costs. In the first quarter, total bids for government securities reached GH¢164.1 billion, but only GH¢104.1 billion was accepted, leaving nearly GH¢60 billion unallocated. This gap effectively injected liquidity back into the system, requiring central bank intervention to absorb it. The policy mix contributed to a broad decline in yields. Government bond yields fell from around 22 to 25 percent in early 2025 to approximately 10 to 13 percent by March 2026, while Treasury bill rates dropped into single-digit territory, with the 91-day bill below five percent. However, recent auction dynamics suggest that this yield compression may be approaching its limits. As yields stabilise at lower levels, investors appear less willing to accept further declines without compensation.

Secondary Market Shows Strain

The secondary bond market is also showing signs of adjustment. Trading volumes declined sharply in the latest week to GH¢599.24 million from GH¢1.69 billion, extending a downward trend from an earlier level of GH¢3.61 billion. The drop reflects weaker participation and softer liquidity conditions. Activity remains concentrated in Domestic Debt Exchange Programme (DDEP) bonds, particularly in the medium-tenor segment. The February 2032 bond traded at a yield of 13.13 percent, while the February 2027 bond cleared at 10.06 percent. A newly issued April 2033 bond recorded limited activity at 12.09 percent. The concentration of trading and decline in overall volumes suggest that liquidity is becoming more selective, even as aggregate system liquidity remains elevated.

Outlook: The April 30 Auction as a Bellwether

The next Treasury bill sale is scheduled for April 30, when the government plans to raise GH¢5.01 billion to refinance GH¢4.43 billion in maturing securities. Market guidance suggests yields may edge higher. Apakan Securities noted that although government demand for funds remains moderated, it anticipates a slight increase in yields at the upcoming auction. The outcome of that auction is likely to provide clearer direction on whether the adjustment in investor sentiment will deepen or stabilise in the near term. The question of whether domestic investors are demanding higher compensation is not yet fully resolved, but repeated soft auctions, mixed yield movements, and declining secondary market activity suggest that the conditions supporting aggressive yield compression are beginning to change.

The bottom line

• Ghana's Treasury bill auctions have missed targets for seven consecutive weeks, with the latest shortfall of 10% signaling persistent investor resistance.
• Yields are diverging: the 91-day bill held at 4.92%, while the 182-day and 364-day bills rose, reflecting selective investor behavior.
• The government's strategy of rejecting high-yield bids to suppress borrowing costs has injected liquidity into the system, requiring massive central bank sterilization.
• Secondary market trading volumes have plunged, indicating weakening liquidity and selective participation even as aggregate system liquidity remains high.
• The upcoming April 30 auction, with a target of GH¢5.01 billion, will be a key test of whether investor pushback will force yields higher.