Ghana: Six Banks Jostle for Getfund’s Ghc2.3 Billion Loan

One consortium and five investment and universal banks have been shortlisted as likely arrangers of a GH¢2.3 billion loan for the Ghana Education Trust Fund (GETFund).

The six banks are looking for an opportunity to raise the total amount or part of it for the GETFund under a financing arrangement that will see between 30 per cent and 40 per cent of the fund’s allocations escrowed for repayment.

The six were part of 11 set of financial institutions that submitted initial expression of interest (IEoI) to a financing team currently searching for funds for the GETFund, a public trust in charge of supplementing government’s efforts in the provision of educational infrastructure in the country.

The GRAPHIC BUSINESS understands that the lucky six include the Barclays Consortium, Societe Generale, Forms Capital, Amprofi Group and CAL Bank.

One person familiar with the transaction said initial assessment of the various proposals indicated that the interested banks may lack adequate capacity to fully deliver what was needed on individual basis.

Education & Health Tax

The arrangement around GETFund’s search for funds is similar to the one done for the Energy Sector Levy Act (ESLA), where a portion of ESLA collections is securitised for a loan used to refinance the energy debt.

As is the case with the ESLA arrangement, the GETFund loan will not receive sovereign guarantee but will be collateralised against the fund’s collections.

In the 2018 Mid-Year Budget Review presented to Parliament on July 19, the government decoupled the 2.5 per cent each of GETFund and National Health Insurance levies from the Value Added Tax (VAT) into separate taxes called Education and Health taxes.

An Investment Banker with DATABANK, Mr Courage Kwesi Boti, told the GRAPHIC BUSINESS on August 20 that that decision was to help prepare the grounds for GETFund’s maiden foray into the market in search of funds.

"Making it a specific tax means that consumers and sellers do not have the right to claim input tax again since it has now become a fixed tax."This increases the volume of money you could get from there. Also, it is now isolated and a dedicated fund that can be securitised to raise the GH¢2.3 billion that they are looking for," he said.As a result, he said the idea was "futuristic" and a bold decision meant to address infrastructure challenges facing the country.He stated further that the guaranteed nature of the GETFund allocations – from the newly constituted Education […]

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