Something is not right about T-bills oversubscription – Joe Jackson


Economist, Joe Jackson, has cast doubts over the high-interest rates on the government’s treasury bills.

He questioned Ghanaians who are still investing in treasury bills at such high rates after the government defaulted on domestic bonds.

In a tweet on February 22, 2023, he stated that something does not seem right, especially with the rate of oversubscription of the bills.

“Why are Ghanaians buying T-Bills at 35.8% from a Govt. that defaulted on domestic bonds at 19%? These T-Bills were even oversubscribed by 61%. Something is quite not right. I pray we don't soon have a T-Bill holders forum,” he wrote.

Last week the government secured GH¢2.76 billion from treasury bills in its latest auction on February 17, 2023.

Treasury bills were over-subscribed by GH¢1,05 billion.

According to the auction results from the Central Bank, the government secured GH¢2.32 billion from the 91-day bill and GH¢435.19 million from the 182-day bill. The 365-day bill did not have any subscriptions.

The target for the auction was GH¢1.7 billion. However, even though the subscriptions surpassed the target, it was lower than the GH¢3.35 billion secured by the government in last week’s auction.

The interest rates however hovered around 35.8%. Even though the interest rates are high and may be good for investors, this may cost the government more when they mature.

Finance Minister Ken Ofori-Atta noted that the main financing source for the 2023 budget is treasury bills and concessional loans.

According to him, this has become the case because of the closure of the international domestic bond market.

He made the comment when he appeared before parliament on February 16, 2023.

"Mr Speaker, as the domestic international domestic bond markets are shut, for the financing of government programmes, we are relying on treasury bills and concessional primary sources of financing for the 2023 budget,” he noted.

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