The government of Ghana is set to borrow GH¢12.7 billion through treasury bills in January 2024, a move aimed at financing the maturation of existing bills. This borrowing target reflects a 1.2% decrease compared to the borrowing in December 2023.
In the first auction of 2024, the government has already successfully raised GH¢3.223 billion, surpassing the targeted amount by 15.24%. With a consistent strong demand averaging GH¢4.0 billion per week, analysts anticipate that the government will comfortably refinance the upcoming maturities. However, higher borrowing targets are expected to address the 2024 budget deficit and provide a buffer for the February 2024 coupon payments on the restructured bonds.
December 2023 witnessed a surge in demand for treasury bills, with investors submitting bids totaling GH¢16.3 billion, surpassing the total maturities of GH¢12.8 billion. The government accepted all bids, highlighting the necessity for high funding to address maturity refinancing requirements.
The yields in December 2023 experienced a mixed outcome. Downward pressure from sharp disinflation offset the upward pressure resulting from an increase in the Cash Reserve Ratio. Notably, the 91-day and 364-day yields reduced by 14 basis points and 74 basis points, settling at 29.4% and 32.5%, respectively. In contrast, the 182-day yield increased by 19 basis points to reach 31.9%.
Many Ghanaians are expressing worry over this developing story as many believe will worsen the country’s woes especially in an election year characterized by excess tensions.
