Omanghana
Economist Dr. Eric Boachie-Yiadom has warned that persistent oversubscription of Ghana’s Treasury bill auctions is diverting funds away from private businesses and restricting their access to domestic credit.
Speaking to 3Business on August 11, 2026, the University of Professional Studies, Accra finance lecturer said the strong appetite for short-term government securities should not be interpreted solely as renewed investor confidence.
According to him, the trend also reflects limited attractive investment opportunities across the broader economy.
Banks and institutional investors are directing substantial amounts of capital into Treasury bills because government securities are generally considered safer than commercial lending and other riskier investments.
This concentration leaves financial institutions with less money to lend to private companies, particularly small and medium-sized enterprises that rely heavily on bank financing to expand operations, purchase equipment and employ more workers.
Dr. Boachie-Yiadom explained that weak performance in Ghana’s equities market has further encouraged investors to seek the relative security and predictable returns offered by government fixed-income instruments.
Demand has continued to rise even as yields increase across most Treasury bill tenors. The economist said this suggests investors have limited incentives to move money into potentially productive but higher-risk areas of the economy.
Recent auction figures illustrate the scale of the demand. The government targeted GH¢5.87 billion but received bids totaling GH¢10.51 billion, representing an oversubscription of approximately 79 per cent.
Of the amount submitted, the government accepted GH¢8.65 billion and rejected about GH¢1.86 billion.
Similar patterns have been recorded since May 2026, with oversubscription rates reportedly ranging between 35 and 80 per cent. The 364-day Treasury bill has attracted particularly strong interest from institutional investors.
Although the high demand gives the government access to immediate financing and greater flexibility in meeting short-term obligations, analysts warn that excessive reliance on domestic borrowing can produce wider economic consequences.
When government securities offer attractive returns with relatively low risk, banks may prefer purchasing them instead of lending to businesses. Private companies may consequently face stricter borrowing requirements, reduced credit availability and higher interest rates.
The situation could weaken business investment, job creation and domestic production, undermining Ghana’s longer-term economic recovery.
Dr. Boachie-Yiadom’s warning adds to the debate over how Ghana should channel domestic savings while addressing its financing needs. He stressed the importance of developing stronger capital-market alternatives and creating conditions that make productive private-sector investment more attractive.
Balancing government borrowing with adequate credit for businesses will be essential to ensure that short-term fiscal relief does not come at the expense of sustainable economic growth.
Source: Omanghana
