Finance Minister Dr. Cassiel Ato Forson has revealed that the recent decline in Treasury bill (T-Bill) interest rates has saved the country approximately GHC 1 billion in borrowing costs.
Speaking at the National Economic Dialogue on March 3, 2025, he attributed the savings to the government’s strategy of rejecting expensive bids and forcing down rates over the past few weeks.
According to the Minister, containing higher inflation and stabilizing the cedi remain key to Ghana’s fiscal strategy and economic growth. He noted that inflation has remained stubbornly high at around 23% since May 2024, partly due to climate-related challenges such as drought in key agricultural areas and delayed rainfall, which have harmed food production. Additionally, supply chain disruptions have further impacted food costs, worsening food insecurity, particularly for the most vulnerable.
Government borrowing costs had surged in 2024, with 91-day T-Bill rates exceeding 30% at certain points. However, in the latest auction (Tender 1944, held on February 28, 2025), T-Bill rates saw a sharp decline, with:
• 91-day bills falling to 20.79% (from 24.48% in the previous auction).
• 182-day bills dropping to 22.99% (from 25.39%).
• 364-day bills decreasing sharply to 22.70% (from 27.30%).
Dr. Ato Forson emphasized that reducing borrowing costs is essential to addressing Ghana’s fiscal challenges.
He further emphasized that reducing borrowing costs will free up resources for more critical areas of the economy.
“The recent reduction in t-bills alone is saving Ghana about GHC billion and that 1 billion can be channeled to critical areas of the economy.”, he told participants at the dialogue.
“Currently we need to take steps to reduce the borrowing and also reduce the cost of borrowing so that we will be able to channel the dividends to support our national development”, he emphasized.
Dr. Ato Forson highlighted that reducing risk premiums, improving access to credit for the private sector, and ensuring exchange rate stability will be key to sustaining Ghana’s economic recovery. Lower borrowing costs, he explained, will also help contain debt service costs and mitigate the pass-through effect of import prices on inflation.
Despite the gains, he acknowledged that balancing lower interest rates with sustained investor.
