Dr. Ernest Addison
The government of Ghana has exceeded its initial target of raising GH¢ 2.10 billion to GH¢ 2.57 billion from the debt market in the latest auction of treasury bills with maturities of 192, 182 and 364 days.
The bids for the 91-day, 182-day, and 364-day T-Bills amounted to GH¢2,170 million, GH¢375 million, and GH¢80 million, respectively.
The government accepted bids worth GH¢2,155 million, GH¢353 million, and GH¢ 67 million for the 91-day, 182-day, and 364-day T-Bills, respectively.
Interest rates for these T-Bills were set at 29.1%, 31.2%, and 33.0% for the 91-day, 182-day, and 364-day maturities, respectively. On average, the Government’s interest cost on T-Bills currently stands at 31.1%.
In the previous week’s auction, a similar trend was observed as the government exceeded its target by GH¢510 million, ultimately raising GH¢3.09 billion from the debt market.
Despite the high T-Bill rates, real returns on these short-term debt instruments remain negative, as the rates fall below the prevailing inflation rate of 40.1%.
Meanwhile, the Bank of Ghana has reported a significant increase in Ghana’s public debt during the second quarter of 2023, rising by approximately GH¢6.3 billion.
This surge has also pushed the nation’s total debt to GH ¢575.5 billion, equivalent to around GH $52.3 billion representing a substantial 71.9% of Ghana’s Gross Domestic Product (GDP).
Further analysis of Ghana’s public debt reveals that the external component reached $29.9 billion (¢328.6 billion) in June 2023, surpassing the April 2023 figure of $29.3 billion (¢321.3 billion).
In contrast, the domestic debt amounted to ¢246.9 billion at the end of June 2023, making up approximately 30.8% of the nation’s GDP.