Treasury exceeds GHS 2.58bn T-Bill target by GHS 510m at average rate cost of 30.5%

The Finance Ministry in the issuance of its 91,182 and 364 days treasury bills exceeded its target of raising GHS 2.58bn.

The Treasury in the auction of the short-term securities exceed its target by some GHS 510m as it managed to raise GHS 3.09bn from the debt market.

This is after it missed its GHS 3.75bn target by GHS 414m in the previous auction.

Bids for the 91, 182 and 364 days T-Bills amounted to GHS 2,143 million, GHS 674 million and GHS 433 million respectively with Government accepting bids amounting to GHS 2,114m, GHS 548m and GHS 433m made for the 91, 182 and 364-day T-Bill.

The 91, 182 and 364 days T-Bills were auctioned at interest rates of 28.5%, 30.6% and 32.5% respectively.

On average, Government’s interest cost on T-Bills stands at 30.5%.

Despite the high rates on T-Bills, real returns on the short-term debt instruments are still negative given that the rates are below the prevailing inflation rate of 40.1%.

Total outstanding T-Bills issued by Government as of end-August 2023 stood at GHS 55bn.

With interest rates on T-Bills hovering between 28% and 32%, Government is expected to make interest payments above GHS 17bn per annum.

Meanwhile, the Bank of Ghana has revealed that Ghana’s public debt witnessed a notable uptick, surging by approximately ¢6.3 billion during the second quarter of 2023. This substantial increase propelled the nation’s total debt to ¢575.5 billion, which translates to some $52.3 billion.

Strikingly, this figure represents a significant 71.9% of Ghana’s Gross Domestic Product (GDP).

Breaking down the components of Ghana’s public debt, data from the Central Bank discloses that the external component reached $29.9 billion (¢328.6 billion) in June 2023, surpassing the figure recorded in April 2023, which stood at $29.3 billion (¢321.3 billion).

In contrast, the domestic debt stood at ¢246.9 billion at the close of June 2023, constituting approximately 30.8% of the nation’s GDP.