Ghana's government keeps coming up short when trying to borrow money from investors. Officials wanted to raise almost four billion cedis last week but only managed to attract 3.6 billion in offers. This marks the fifth straight week that people have not shown enough interest in government bonds. The shortfall reached 300 million cedis and threatens to hurt the country's ability to pay its bills. Experts worry that investor confidence has taken a serious hit.
The problem stems from falling interest rates that make government bonds less profitable for investors. Officials have been pushing rates down to save money on borrowing costs. However, this strategy has backfired as fewer people want to buy bonds that offer smaller returns. The government even rejected some of the limited offers it received because investors demanded higher rates than officials wanted to pay. This rejection made the funding gap even worse.
Most investors who did participate focused on short-term 91-day bills worth about 2.9 billion cedis. Longer-term options attracted much less interest from the market. The 182-day bills brought in just over 600 million cedis and the longest 364-day option barely reached 130 million cedis. These numbers show that investors prefer quick returns over longer commitments.
The government plans to ask for even less money during the upcoming auction. Officials hope that lowering their target to 3.4 billion cedis might attract more bidders. Market watchers are keeping close tabs on whether this strategy will work or if the borrowing troubles will continue.
The problem stems from falling interest rates that make government bonds less profitable for investors. Officials have been pushing rates down to save money on borrowing costs. However, this strategy has backfired as fewer people want to buy bonds that offer smaller returns. The government even rejected some of the limited offers it received because investors demanded higher rates than officials wanted to pay. This rejection made the funding gap even worse.
Most investors who did participate focused on short-term 91-day bills worth about 2.9 billion cedis. Longer-term options attracted much less interest from the market. The 182-day bills brought in just over 600 million cedis and the longest 364-day option barely reached 130 million cedis. These numbers show that investors prefer quick returns over longer commitments.
The government plans to ask for even less money during the upcoming auction. Officials hope that lowering their target to 3.4 billion cedis might attract more bidders. Market watchers are keeping close tabs on whether this strategy will work or if the borrowing troubles will continue.
