Treasury bills are short-term loans to the Government of Ghana. You lend for a fixed period, the government repays the face value at the end, and your return is the difference between what you paid and what you get back. They are the default savings instrument for a large number of Ghanaians, and the benchmark against which every other investment should be judged.
This guide explains the mechanics and how to evaluate the return. It deliberately does not quote current rates — they change at every auction, and a rate printed in an article is wrong within days.
The three tenors
Ghana issues treasury bills in three standard maturities:
| Tenor | Term | Typical use |
|---|---|---|
| 91-day | About three months | Short-term parking of cash; highest flexibility |
| 182-day | About six months | Middle ground |
| 364-day | About one year | Locks in a rate for longer; usually the highest yield |
Longer tenors normally pay more, compensating you for committing your money for longer. When that relationship inverts — shorter bills paying more than longer ones — it signals that the market expects rates to fall, or has concerns about the near term. An inverted curve is informative and worth noticing.
How they are sold: the auction
Treasury bills are issued through regular auctions conducted by the Bank of Ghana on behalf of the government. The government announces how much it intends to raise across the tenors; bidders submit bids; the government accepts bids up to its target.
Two outcomes get reported each week, and both tell you something:
- Oversubscription — bids exceeded the target. Appetite for government paper is strong, which generally allows the government to accept lower yields.
- Undersubscription — bids fell short of the target. Demand is weak, which tends to push yields up as the government competes for funds.
Following the subscription pattern over several weeks tells you more about the direction of rates than any single week's yield. It is a demand signal.
Why the yield moves
Yields at auction respond to the Bank of Ghana's policy rate, to inflation expectations, to how much the government needs to borrow, and to the alternatives available to banks and institutional investors. Because banks are large buyers of government paper, treasury bill yields and bank profitability are closely linked — see how to analyse Ghana's listed banks.
How the return is calculated
Treasury bills are issued at a discount. You pay less than the face value and receive the face value at maturity; the difference is your interest. There is no periodic coupon payment.
Two different numbers are commonly quoted, and confusing them is the most frequent mistake:
- The discount rate expresses the discount as a percentage of the face value.
- The interest rate or yield expresses your gain as a percentage of the amount you actually invested.
Because you invest less than the face value, the yield on your money is always slightly higher than the discount rate. When comparing a treasury bill against a bank deposit, use the yield on the amount invested — that is the figure that corresponds to a deposit rate.
The only comparison that matters: yield against inflation
A treasury bill yield is a nominal number. Your real return is the yield minus inflation:
Real return ≈ treasury bill yield − inflation rate
If bills yield 15% while inflation runs at 20%, you have locked in a real loss of roughly five percentage points — with certainty, because the nominal return is fixed. The money is safe; the purchasing power is not.
This is the discipline that separates informed savers from the rest. Check the current inflation rate published by the Ghana Statistical Service against the current auction yield every time you invest or roll over. We explain the arithmetic in how inflation affects savings and investments.
What you are and are not protected against
Credit risk is minimal in cedi terms. A government borrowing in its own currency can ordinarily meet those obligations. Treasury bills are conventionally described as the risk-free rate for precisely this reason.
Inflation risk is entirely yours. As above. Fixed nominal return, variable purchasing power.
Reinvestment risk is real. When your 91-day bill matures, prevailing rates may be lower. You cannot assume today's yield will be available next quarter — which is the argument for the 364-day tenor when you believe rates have peaked.
Currency risk applies if your obligations are in dollars. A cedi return is only "risk-free" relative to cedi spending. See what drives the cedi.
Liquidity before maturity is limited. You are committing for the term. Ask your bank or dealer what the options are if you need the money earlier, and what it would cost.
Treasury bills versus shares
These are not competing versions of the same thing; they answer different questions.
| Treasury bills | Listed shares | |
|---|---|---|
| Return | Fixed and known in advance | Unknown; can be negative |
| Term | Defined maturity | Indefinite |
| Inflation protection | None beyond the fixed yield | Possible over long periods, via growing earnings |
| Suitable for | Money needed within a year or two | Money that can stay invested for years |
A sensible portfolio usually holds both. Bills are where near-term money and emergency funds belong; equities are for the long horizon. Using one for the other's job is the error. Our guide to investing with a small budget covers using bills as the accumulation stage before buying shares.
Frequently asked questions
Where do I buy treasury bills?
Through banks and licensed dealers that participate in the auction process on behalf of clients. Confirm the current procedure, documentation and any minimum amount directly with your bank or with the Bank of Ghana, as these are set by the institutions rather than by the instrument.
What is the minimum investment?
This is set by the institution through which you invest rather than being a fixed national figure. Ask your bank; treat any amount quoted elsewhere as needing confirmation.
Is the interest taxed?
Tax treatment of investment income is set by legislation and can change. Confirm the current position with the Ghana Revenue Authority or a qualified tax adviser before relying on a net figure.
Can I lose money on a treasury bill?
In nominal cedi terms, repayment at maturity is as secure as a sovereign obligation in its own currency gets. In real terms you lose whenever the yield is below inflation, which has happened for extended periods.
In short
Three tenors, sold at a discount through regular auctions, with yields that move every week on demand and policy. The mechanics are simple. The discipline is in annualising the return, using the yield on the amount actually invested, and subtracting inflation before deciding whether the rate is any good.
