‎Why No One Talks About the Government Set to Borrow GH¢4.262 Billion Anymore in Its Last Auction Bill for 2024

The government concluded its borrowing plans for 2024 with a treasury bills auction that took place on December 21, 2024. Originally targeting GH¢4.262 billion, the auction recorded a marginal oversubscription, attracting a total of GH¢5.404 billion in bids.

‎According to the official results released on December 23, 2024, the breakdown of secured funds was as follows:

‎91-day treasury bill: GH¢4.028.95 billion accepted.

‎182-day treasury bill: GH¢867.34 million accepted.

‎365-day treasury bill: GH¢508.61 million accepted.

‎This marks a significant contrast compared to the previous week's auction, where the government raised a total of GH¢8.200.58 billion.

‎Interest Rates on Treasury Bills for December 2024

‎For the latest auction, the interest rates were set as follows:

‎91-day bill: 27.85%

‎182-day bill: 28.57%

‎365-day bill: 29.95%

‎These rates indicate a slight increase, continuing the trend of high yields aimed at attracting investors amid challenging economic conditions.

‎Treasury Bills: The Government's Borrowing Lifeline

‎Treasury bills have become the government's primary borrowing tool, largely due to its limited access to international capital markets. This dependence stems from ongoing economic challenges and creditworthiness concerns, which have significantly restricted the government’s ability to secure funding from external sources.

‎Despite the oversubscription in the December 21 auction, the lower amount raised compared to the previous week suggests dwindling investor interest in the government's short-term debt instruments. This may signal a growing fatigue among investors or concerns about the sustainability of the current borrowing levels.

‎What Does This Mean for 2024?

‎As the government wraps up its borrowing plans for the year, it faces mounting pressure to explore alternative funding sources. While treasury bills have provided a much-needed financial buffer, reliance on this tool alone is unsustainable in the long term.

‎The public and stakeholders must remain vigilant, as the government’s borrowing strategy will have significant implications for inflation, debt sustainability, and overall economic growth in 2024.