Solving Ghana’s Liquidity Problems With Securitisation Transaction Through Oil – A Case Study

Solving Ghana’s Liquidity Problems With Securitisation Transaction Through Oil – A Case Study

Securitisation transaction could be outlined as the act of changing an asset into marketable securities typically for the purpose of increasing dollars.

The notion is dependent on intercontinental industry practices involving economic transactions in which an enterprise brings jointly property, generally receivables, and later transferred to a specific function entity or motor vehicle, which finances the acquisition by issuing securities.

Securitisation is usually an advancement to the funding of existing business operation.

Securitisation transactions are incredibly popular with mortgage-backed securities there are at present additional non-economic kinds of assets and long term income flows. The next are examples of property that can usually be securitised.

Plane leases, vehicle financial loans(key and sub-key),car leases, boat financial loans, credit card receivables, devices leasaes,residence equity financial loans, manufactured housing contracts, marine transport containers and chassis leases,morgages(household and commercial).The relaxation are railcar leases, true estate, leisure car or truck financial loans, royalty streams, stranded utility fees, trade receivables, train wagons leases, truck loans, oil exploratory, and other long run receivables.

Ghana School Financing Facility is Ghana’s very first formal “securitisation transaction”. It is a structured threat-sharing facility which addresses a regional husband or wife bank’s preliminary portfolio of prolonged-expression area currency financial loans to faculties. The aim was to enable local banks to study how to make revenue and contribute to growth in the place as effectively.

The Global Finance Corporation (IFC) presents advisory services to the banking companies to course of action and observe the faculty financial loans while at the identical time helping the community faculties with administration training and strategic organizing to enable the colleges function a lot more like sustainable firms. This assisted to boost their credit rating hazard profile with the banks.

The IFC set up a $2.1million hazard-sharing facility with Ghana’s Have confidence in Lender Ltd supplemented by advisory products and services by IFC and African Development Lender to the Rely on Bank and its customer educational institutions.

It is predicted that The Believe in Lender will boost its size and financing to personal universities, implement expense-helpful, option funding system for colleges. It will also afford the lender the chance to prepare itself for securitisation transaction when the current market is completely ready.

The adhering to presents an perception into an market for a opportunity Securitisation transaction in Ghana.

Ghana has a modest upstream oil industry with a single onshore and 5 offshore sedimentary basins. The major drive at the rear of the oil and fuel sector in Ghana is the have to have to lower the country’s dependence and reliance on hydroelectricity.

The authorities are ordinarily concentrating on a “major” budgetary surplus to lower the in general budgetary deficit and the domestic debt. Oil subsidies have been slash again, but community sector wages have been amplified. Nonetheless, the the latest computerization of customs need to improve tax and community sector revenues, and consist of the in general budgetary deficit.

A number of initiatives to boost cassava, textiles and palm oil really should improve non-classic exports although powerful costs for cocoa and gold should really direct to higher export earnings. Superior oil costs continue to harm Ghana. It is estimated that oil imports will make up above 20% of the total import bill, leaving the economy vulnerable to huge selling price swings. Massive transfers, IFI credits, donor assist and generous debt reduction from the Paris Club have brought the external current account deficits at a lot more manageable stages.

Schemes, and reforms, such as raising low energy tariffs towards international levels. Because the mid-1980s the Authorities of Ghana has been funding initiatives applying compact levies on petroleum items. The US$ 250,000 lifted per year is paid into an Vitality Fund and applied to encourage renewable vitality and strength productive tasks.

In Ghana petroleum functions are ruled by the Petroleum Legislation of 1984 which empowers GNPC to work in all open acreage of the nation on its individual or in association with international partners.

More compact organizations are acquiring it less difficult to explore in Ghana than in some of its neighbours in West Africa. This is because of in section to useful terms of the deal which involve the pursuing features: No entrance conclude payments these as signature or manufacturing bonuses negotiable royalties and money tax (now at 35%) no restrict on cost restoration, reduced rental payments, no limitations on the repatriation of resources and no import duties on exploration and creation machines and elements…

With securitisation, the GNPC can securitise its rights to receive payments for crude oil sold to other oil refineries. The agreements symbolizing these receivables must be drafted this kind of that anti-assignment clauses in favour of the refineries for example will be effective but ought to not be enforced considering that in performing so the securitisation cannot go on.Ghana and for that make a difference Ghanaians will have to gain from this black gold.


1.Africa -Ghana organising in the informal sector(on line) (accessed 29th April 2006)
2.Ghana Chamber of Commerce Publication
3.Ghana Self-assessment (on the internet)out there on accessed on 21/06/07
4.Personal Sector Progress Method for Ghana (on-line) accessible on kingdom/pubs/data files/ghana/priv-sect-dev-method/ accessed on 21/06/07
5.Securities Trade Commission yearly Report (on the web)obtainable on accessed on 21/06/07