Ghana’s financing woes on the domestic market seem unending as government failed to meet its weekly treasury bill auction target for the 5th straight week.

Government per its Issuance Calendar published for the period July to September 2024, based on the 2024 domestic maturities for the period and the Net Domestic Financing (NDF) from the 2024 Budget
Statement and Economic Policy, had indicated, it planned to issue a gross amount of GH¢78.44 billion for the period, July to September, 2024. This comprised some GH¢53.807 billion to rollover short term maturities, with the remaining GH¢24.63 billion as fresh issuance to meet Government’s financing requirements.

However, for the 5th straight week government recorded an undersubscription of treasury bill, issuing only GH¢ 5.299 bn out of the targeted GH¢ 6.557 bn for the Tender 1915 held on August 9. This reflecting in a 19% undersubscription and a worsening in the 13% undersubscription in its first Auction of August.

Government in the month of July, was left with a financing gap of GH¢2.298 billion, after it failed to meet weekly targets for three consecutive weeks, cumulating into a 13% shortfall of its GH¢18.075 bn target.

With government’s financing from the domestic market being only the issuance of Treasury Bills in line with the IMF program, an extended continuation of the trend could leave government in a precarious situation in order to honor its other financing obligations.

The cost of borrowing on the treasury market remains relatively unchanged, however the share of longer termed bills issued keeps diminishing, with the 364-day bill representing just 4.4% (GH¢231.14) of the total bills issued in the just ended auction.

With the Ghana Statistical Service expected to on Wednesday disclose inflation figures for July, the new announced rates could have a ripple effect on the cost of borrowing on upcoming Friday’s Tender 1916, where government seeks to raise a less ambitious GH¢ 4.968 billion.

Attached is the results of Tender 1915, held on 9th August: