Accra: Finance Minister insists Falling T-Bill Rates Signal has renewed Investor Confidence

Ghana‘s Treasury bill interest rates have dropped significantly, a development Finance Minister Dr. Cassiel Ato Forson attributes to growing investor confidence in the government’s economic policies and prudent fiscal management. In his 2025 Budget Statement, he stated that the decline reflects the administration’s efforts to restore stability and ease the cost of borrowing.

According to the latest auction results on March 7, 2025, the 91-day Treasury bill rate fell to 17.71%, down from 20.79% in the previous week. The 182-day rate dropped to 18.96%, compared to 22.98% earlier, while the 364-day rate declined to 19.98%, marking a substantial reduction in borrowing costs. These figures represent some of the lowest interest rates recorded in nearly two years, signaling a shift in investor sentiment.

Dr. Forson described the rate decline as a sign that investors are regaining trust in the economy. He noted that the oversubscription of the latest Treasury bill auction, which recorded total bids of GH¢10.30 billion against a target of GH¢5.73 billion, further proves the confidence investors have in Ghana’s economic recovery. The government accepted GH¢6.22 billion of the bids, marking an oversubscription rate of nearly 80%.

The reduction in interest rates on government securities is expected to have broader economic benefits. Lower Treasury bill rates mean the government will spend less on domestic interest payments, freeing up resources for development projects. It also creates room for private sector investment, as lower yields on government securities encourage banks and institutional investors to direct funds toward businesses and productive sectors of the economy.

Dr. Forson reiterated that the government’s policies are geared toward fiscal consolidation, reducing dependence on expensive short-term borrowing, and exploring alternative funding sources to drive economic growth.

He assured that the administration remains committed to maintaining macroeconomic stability and ensuring that Treasury bill rates continue on a downward trend.

With Treasury bill rates falling below 20% for the first time in 20 months, financial analysts predict a more stable investment climate. However, concerns remain over Ghana’s debt obligations in 2027 and 2028, when the country faces significant repayment burdens. The ability to sustain lower borrowing costs while managing these upcoming liabilities will be crucial in determining the long-term stability of the economy.

Last Updated on March 14, 2025 by samboad