Senior Lecturer and Economist at the University of Professional Studies, Accra (UPSA), Dr Eric Boachie-Yiadom has stated that, the continued oversubscription of Ghana’s Treasury bill auctions is a sign of limited investment opportunities in the economy and growing investor preference for government-backed securities.
In an interview with 3business on August 10 2026, The Economist said the trend could also be contributing to the crowding out of the private sector, as more funds are channeled into government securities instead of businesses.
He further added that, the strong appetite for Treasury bills is particularly significant given the decline in yields from about 11 per cent at the beginning of the year to around 5.76 per cent.
“The continuous oversubscription of the Treasury bill rate for this past month tells us there’s not much investment options for businesses and it also shows the risk tolerance for investors that investors are now targeting more of a safety asset.” He said.
According to him, investors appear more willing to lend to government at lower returns than commit their funds to private-sector investments that could offer higher returns but carry greater risks.
Dr Boachie-Yiadom said the trend was also evident when the volume of funds going into Treasury bills was compared with credit available to the private sector.
He noted that private-sector credit outstanding had averaged between GH¢110 billion and GH¢120 billion monthly since the beginning of the year.
However, he noted investment in Treasury bills had reached about GH¢45 billion in a single recent auction, highlighting the growing movement of funds towards government securities.
“It shows that more money is being moved to government securities, which is a concern that private sector, number one, either they are unable to afford the rate that is given or they may not get the necessary funds to invest in strategic sectors.” He stated.
The UPSA lecturer urged the government to take steps to ensure that more funds are made available to businesses at affordable interest rates.
He said banks should also be encouraged to increase lending to the private sector, suggesting that government could consider reducing the volume or value of Treasury bills offered for subscription.
“Government needs to pay critical attention to ensuring that funds reach private sector at a very low cost,” he said.
He also warned that unless more financing is directed towards productive private-sector activities, businesses could continue to struggle to access the capital needed to expand, invest and create jobs.
Meanwhile, Government’s latest return to the domestic money market in August has recorded another strong investor response, with bids reaching 11.636 billion cedis, representing some 87 per cent oversubscription of its 6.217 billion cedis target.
The outcome of Tender 2019 marked government’s seventh consecutive oversubscribed auction.
Treasury bills are short-term government securities issued to raise funds for government financing and cash-flow management. They are generally considered relatively low-risk investment instruments.
An oversubscribed Treasury bill auction occurs when investors submit bids exceeding the number of securities the government intends to sell.
While strong demand allows government to raise funds, persistent oversubscription can also indicate a strong preference for government-backed assets over private-sector investments.
Economists have consequently raised concerns about the potential impact on private-sector access to credit and the broader flow of funds into productive economic activities.
By Coffie Mawuedem Noel
