The Government of Ghana has secured its lowest borrowing costs in 19 months after rejecting GHC 10.9 billion in bids in the latest Treasury Bill (T-Bill) auction. Results from Tender 1943, held on February 21, 2025, show a significant decline in interest rates across all short-term government securities, marking the fourth consecutive week of falling yields.

The auction attracted GHC 20.5 billion in total bids, but the government accepted only GHC 9.6 billion, reflective of its renewed strategy against high borrowing costs. This GHC 10.9 billion in rejected bids is also higher than GHC 8.2 billion in rejections in Tender 1942 and GHC 2.9 billion in Tender 1941.

For the 91-day bill, the government received GHC 7.39 billion in bids but accepted GHC 4.23 billion, rejecting GHC 3.15 billion. This saw the weighted average interest rate fall to 24.48%, down from 26.86% in the previous auction. The 182-day bill attracted GHC 5.00 billion in bids, but only GHC 1.43 billion was accepted, with GHC 3.57 billion rejected. This led to a decline in the rate from 27.81% to 25.39%. The 364-day bill, which saw the highest level of bids, received GHC 8.11 billion, but the government took only GHC 3.97 billion, rejecting GHC 4.14 billion. The rate on this tenor also saw a sharp drop from 29.07% to 27.30%, the lowest in recent months.

The continued rejection of expensive bids suggests that the government remains committed to forcing rates lower, despite strong investor demand.

While, the rejection of GHC 3.57 billion in 182-day bids alone suggests that the government is particularly focused on reducing medium-term borrowing costs. The return of the 364-day bill at a significantly lower rate is also a sign that investors are adjusting to the government’s new stance and beginning to accept lower yields.

.The government’s ability to maintain this downward trend in interest rates however, will likely depend on a continued fiscal discipline and signal from the government’s first budget in about two weeks and a general inflation stability.

For the upcoming Tender 1944, the government has set an even lower target of GHC 6.49 billion, maintaining its cautious approach to borrowing in the weeks ahead.

A continuation of this trend could see treasury Bill rates fall even further, reducing the government’s debt servicing burden.

While the current strategy appears to be yielding results, Ghana’s long-term challenge remains—ensuring that investor confidence stays intact while gradually shifting away from heavy reliance on short-term borrowing.