GHANA Law and Practice Contributed by: Adelaide Benneh Prempeh, Michelle Nana Yaa Essuman, David William Akuoko-Nyantakyi and Audrey Nana Oye Addy, B&P Associates
4.12 Participation of Government- Sponsored Entities In Ghana, two known government-sponsored SPEs are known to be engaged in securitisation. Daakye Trust PLC This SPE securitises cash flows from the Ghana Education Trust Fund (GETFund) levies, which are funds collected specifically for educational purposes. Daakye Trust benefits from legislative backing, as the GETFund levy law ensures that these levies are channelled into a dedicated col - lection account for debt servicing on Daakye’s bonds. This legislative support guarantees a steady cash flow, making the bonds attractive to investors. Additional credit enhancement is provided through guarantees by the Ministry of Finance, and while general transaction approv - als were secured, no rating was required due to the originator being the government of Ghana. Investors perceive this securitisation as having a low risk similar to government securities. ESLA PLC The underlying asset in this transaction is the Energy Sector levies. This SPE was established to address energy sector debts owed to banks and trade creditors. The Energy Debt Recovery Levy, a tax imposed on petroleum products, pro - vides a stable revenue stream, securing ESLA’s bond issuances. Additionally, the Ministry of Finance offers a capped cash commitment of up to GHS600 million to cover any shortfall in the Debt Service Reserve Account. This backstop further bolsters investor confidence by securing debt repayment even in the event of significant underperformance. 4.13 Entities Investing in Securitisation Generally, institutions involved in the financial sector invest in securitisations: pensions, bank - ing, insurance and the securities sector. Spe -
cifically, banks, insurance companies, pension companies, mutual funds, unit trusts and the like are the kinds of entities that undertake such investments. Beyond these entities, there may be some high-net-worth individuals that explore investment in securitisation. Material Rules for Pension Scheme Investments The National Pension Regulatory Author - ity (NPRA) Investment Guidelines for Pension schemes provide for limits that are designed to protect pension funds and ensure that portfolios remain well-diversified, thereby safeguarding the returns promised to pension beneficiaries. The rules are as follows. • A 35% total allocation cap on investments in corporate debt securities within a pension scheme’s portfolio. • A 5% maximum per issuer and 5% per issue limitation to promote diversification and reduce concentration risk. 4.14 Other Principal Laws and Regulations Listing Rules of the Ghana Stock Exchange The GSE may consider the admission of debt securities of the SPE if the security concerned has a total issue amount of not less than GHS1 million face value and the SPE has at least 50 holders of such securities. Government securi - ties are exempt from these requirements. The debt security the SPE seeks to admit must have been created and issued under a Trust Deed duly approved by the SEC. The Corporate Governance Code of the Securities and Exchange Commission Every SPE that has its securities admitted to trading on the GSE must comply with the Cor - porate Governance Code for Listed Companies
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