Ethiopia’s Treasury Bill (T-Bill) market displayed remarkable strength and resilience during July and August 2025, according to the inaugural Monthly Domestic Debt Bulletin released by the Ministry of Finance’s Debt Management Division. The period was marked by strong issuance activity, overwhelming investor interest, and subscription levels that underscore growing confidence in the government’s domestic debt instruments.
Strong Issuance Backed by Investor Confidence
During the two-month period, the government raised ETB 111.1 billion, comfortably surpassing the planned target of ETB 103.4 billion. This achievement highlights both the market’s capacity and the effectiveness of the government’s debt management strategy.
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Investor appetite was even more striking. Bids reached ETB 164.7 billion, representing a 159% investor demand rate. On average, the subscription rate came in at 107%, reflecting a liquid market environment and sustained appetite for government securities.
Net issuance during the period stood at ETB 23.9 billion, accounting for 14% of the annual target—a solid contribution toward the broader domestic financing plan.
Investor Appetite by Maturity: Shorter Is Better
A closer look at subscription levels by tenor reveals a clear investor preference for shorter-term instruments.
- 28-day T-Bills drew extraordinary demand, with a 685% subscription rate, pointing to investors’ strong preference for very short-term placements.
- 91-day bills also attracted impressive interest, registering a 299% subscription rate.
- The 182-day tenor achieved a full subscription and beyond, at 112%, signaling balanced demand for medium-term holdings.
- By contrast, the 364-day tenor lagged behind, with a modest 35% subscription rate, underscoring limited appetite for longer maturities.
This maturity profile suggests that while demand for T-Bills is robust overall, investors are particularly attracted to the liquidity and flexibility of short-dated instruments.
Dominance of Banks and Pension Funds
The ownership structure of Ethiopia’s T-Bill market is concentrated among a few major institutional players:
- The Commercial Bank of Ethiopia (CBE) holds the single largest share at 45.3% of outstanding T-Bills.
- Pension funds are also significant, accounting for 32.5% of the total market.
- Other commercial banks collectively own 13.5%.
- Insurance companies contribute 6.1% to the portfolio.
- Ethiopian Investment Holdings (EIH) holds a smaller but notable 2.6%.
Together, CBE and pension funds control nearly 80% of the T-Bill market, underscoring their dominant role in financing the government’s domestic debt needs. The remaining share is distributed among other banks, insurers, and public investment entities.
Beyond the Snapshot
The Ministry of Finance’s bulletin offers much more than headline figures, covering issuance performance, yield movements, and the overall domestic debt stock. But even at a glance, the July–August data paints a clear picture: Ethiopia’s T-Bill market is vibrant, liquid, and well-subscribed.
The strong demand across short-term instruments not only signals investor confidence but also provides the government with a reliable domestic financing channel. As Ethiopia continues refining its debt management strategy, the performance of the T-Bill market will remain a crucial barometer for financial stability and investor sentiment.
