Ghana’s Treasury bill rates have fallen below 20% for the first time in 20 months, with the 91-day rate at 17.72%. This decline reflects a change in government borrowing strategy and increased investor confidence. Despite the positive signs, ongoing economic stability is crucial for long-term benefits.
Ghana has seen its Treasury bill rates fall below 20% for the first time in nearly 20 months, indicating a change in government borrowing strategy and bolstered investor confidence in its economic recovery. Recent data from the Bank of Ghana reveals a significant drop: the 91-day T-bill rate decreased to 17.72%, the 182-day bill to 18.97%, and the 364-day bill to 19.98%. These figures reflect a notable decline from last week’s rates of 20.79%, 22.99%, and 22.69%, respectively.
This reduction in T-bill rates highlights a decreased reliance on short-term domestic borrowing, as the government aims for fiscal consolidation and seeks alternative funding sources. In January 2025, the government secured GH¢38.45 billion through T-bills, but authorities have begun rejecting higher bids to lower yields and decrease borrowing costs. Notably, total bids accepted decreased from GH¢7.41 billion on February 28 to GH¢6.22 billion on March 7, indicating a strategic effort to reduce excessive borrowing.
President John Dramani Mahama stated during his State of the Nation Address that the decline in T-bill rates reflects increased investor confidence in the government’s fiscal discipline and economic management, affirming, “The continuing decline in T-bill rates signals growing investor confidence in the country’s fiscal management.”
The consistent decrease in interest rates is likely to: lower borrowing costs for individuals and businesses, easing credit access; reduce the government’s debt servicing expenses, allowing more funds for development; and promote private sector growth as investors move from government securities to other investments. However, experts warn that the path to sustained economic stability and effective inflation control is essential for long-term benefits, especially as Ghana cannot currently access international capital markets and faces challenges in the local bond market after its debt restructuring.
In summary, Ghana’s Treasury bill rates have dropped below 20% for the first time in 20 months, reflecting a strategic shift in government borrowing. This decline not only fosters investor confidence but also reduces borrowing costs for both the government and businesses. However, the success of these initiatives hinges on ongoing economic stability and effective inflation management.
Original Source: www.graphic.com.gh
