Fixing Ghana’s Liquidity Troubles With Securitisation Transaction Through Oil – A Situation Examine

Securitisation transaction could be defined as the act of converting an asset into marketable securities usually for the function of raising cash.

The strategy is dependent on global current market procedures involving fiscal transactions in which an company delivers jointly belongings, largely receivables, and later on transferred to a exclusive intent entity or car, which funds the acquisition by issuing securities.

Securitisation is usually an improvement to the funding of present company operation.

Securitisation transactions are very well known with home finance loan-backed securities there are currently much more non-fiscal sorts of belongings and upcoming income flows. The following are examples of belongings that can commonly be securitised.

Plane leases, vehicle financial loans(primary and sub-primary),vehicle leases, boat loans, credit card receivables, devices leasaes,dwelling equity loans, created housing contracts, maritime transport containers and chassis leases,morgages(household and professional).The relaxation are railcar leases, real estate, recreational car loans, royalty streams, stranded utility prices, trade receivables, teach wagons leases, truck loans, oil exploratory, and other upcoming receivables.

Ghana College Financing Facility is Ghana’s to start with official “securitisation transaction”. It is a structured possibility-sharing facility which covers a local associate bank’s original portfolio of very long-expression community currency loans to schools. The goal was to aid neighborhood financial institutions to master how to make income and add to enhancement in the region as perfectly.

The Intercontinental Finance Company (IFC) presents advisory products and services to the banks to system and keep track of the faculty financial loans while at the exact time aiding the neighborhood educational institutions with administration instruction and strategic setting up to permit the educational institutions work a lot more like sustainable corporations. This assisted to enhance their credit threat profile with the banks.

The IFC established up a $2.1million danger-sharing facility with Ghana’s Belief Lender Ltd supplemented by advisory products and services by IFC and African Growth Lender to the Believe in Lender and its client educational facilities.

It is predicted that The Have confidence in Lender will improve its size and financing to private schools, carry out value-powerful, substitute funding mechanism for schools. It will also pay for the lender the option to put together itself for securitisation transaction when the current market is completely ready.

The subsequent presents an perception into an industry for a possible Securitisation transaction in Ghana.

Ghana has a modest upstream oil sector with 1 onshore and five offshore sedimentary basins. The primary push powering the oil and fuel industry in Ghana is the need to have to reduce the country’s dependence and reliance on hydroelectricity.

The authorities are ordinarily targeting a “major” budgetary surplus to decrease the all round budgetary deficit and the domestic financial debt. Oil subsidies have been minimize again, but general public sector wages have been enhanced. Nonetheless, the modern computerization of customs must improve tax and general public sector revenues, and have the over-all budgetary deficit.

A variety of initiatives to enhance cassava, textiles and palm oil ought to increase non-traditional exports when sturdy charges for cocoa and gold ought to lead to better export earnings. Substantial oil selling prices proceed to harm Ghana. It is estimated that oil imports will make up more than 20% of the full import invoice, leaving the economy vulnerable to huge selling price swings. Substantial transfers, IFI credits, donor assist and generous credit card debt reduction from the Paris Club have introduced the exterior existing account deficits at much more workable levels.

Schemes, and reforms, this kind of as growing small energy tariffs to global concentrations. Considering that the mid-1980s the Federal government of Ghana has been financing assignments making use of smaller levies on petroleum items. The US$ 250,000 elevated every year is compensated into an Electricity Fund and made use of to endorse renewable electricity and vitality economical initiatives.

In Ghana petroleum operations are ruled by the Petroleum Regulation of 1984 which empowers GNPC to function in all open up acreage of the state on its very own or in affiliation with international associates.

More compact corporations are obtaining it simpler to discover in Ghana than in some of its neighbours in West Africa. This is thanks in element to beneficial terms of the contract which consist of the following aspects: No front conclude payments this sort of as signature or production bonuses negotiable royalties and revenue tax (presently at 35%) no limit on expense restoration, very low rental payments, no restrictions on the repatriation of resources and no import obligations on exploration and creation products and materials…

With securitisation, the GNPC can securitise its legal rights to acquire payments for crude oil bought to other oil refineries. The agreements symbolizing all those receivables must be drafted this kind of that anti-assignment clauses in favour of the refineries for example will be useful but should not be enforced because in doing so the securitisation cannot go on.Ghana and for that make a difference Ghanaians will have to profit from this black gold.


1.Africa -Ghana organising in the informal sector(on line) (accessed 29th April 2006)
2.Ghana Chamber of Commerce E-newsletter
3.Ghana Self-assessment (on the net)out there on accessed on 21/06/07
4.Non-public Sector Enhancement Strategy for Ghana (on the internet) available on files/ghana/priv-sect-dev-technique/ accessed on 21/06/07
5.Securities Trade Commission annual Report (on the web)available on accessed on 21/06/07

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