Forensic Economics: A Forensic Economic Analysis of Ghana’s Recent $2.2B Bond Sale, Franklin Templeton Global Fund, Enterprise Group, And Related Allegations Of Impropriety..


1.  Background
2.  The General Bond Issue Process and Techniques
3.  Fully Automated System for Issuing/Tendering (FAST)
4.  What is ‘Book Building’
5.  What is Sovereign Debt Re-profiling
6.  What is the IMF Debt Re-profiling Framework?
7.  What is Private Placement of Bonds?
8.  Advantages Of Private Placement
9.  Disadvantages Of Private Placement
10.  The Downsides of The Recent Treasury Bond Issue
11.  Conclusion
12.  Sources/references


ghana yield curve as at april 17, 2017, %
On the 31st of March, the Bank of Ghana announced on its website that it has successfully raise $2.2 billion from a sale of long-dated domestic bonds, thereby boosting its central bank reserves by a third.

It is however important to note that these types of Sovereign debt transactions are not new to Ghana.  Most of the bookbuilders or underwrites namely SAS Ghana, Barclays Ghana and Stanbic have been successfully transacting with the Ghanaian government in these types of financial transactions for at least three straight years.  Hence they are not exactly novices to this type of rodeo.  Franklin Templeton has been a big buyer of Ghana’s LC bonds for many years, thereby supporting government’s budgetary objectives. It is my understanding that they intend to make some more purchases again from the government in May and additional ones in the coming months per the standing Ministry of Finance Debt issue calendar

Per a communiqué from the Finance Ministry the following Monday 4th April, some of the highlights of the transaction included:

  • Largest single-day sale of sovereign debt transaction in SSA: The sale represents the largest amount issued by a sub-Saharan African country in a day, the ministry said in a statement.
  • Offshore buyers constitute more than 90 per cent of accepted bids: Offshore buyers constituted 95 percent of accepted bids, per Barclays Bank Ghana sources.
  • Sale should help central bank ease pressure on cedi: The cedi sunk to a record low of 4.7420 to the dollar last month but rallied to 4.2750 by noon (1200 GMT) on Monday, down 1.17 percent this year, per Thomson Reuters data.
  • Fiscal boost: The transaction should boost the fiscal position of the government of President Nana Akufo-Addo, who was sworn in on Jan. 7, as it reviews a $918-million aid programme with the International Monetary Fund.
  • Helped improve the central bank’s reserves: Boosted central bank reserves by a third, the Finance Ministry said.
  • Helped stabilized the local currency: Helped reduce the pressure on the Cedi. It was also a Cedi-denominated government bond issue which means that the government will not be under pressure to secure dollars in the future to make necessary coupon payments.
  • Support the government in discharging its civil duties: This cash inflow was just what the government needed to help it discharge its duties to the people.
  • Debt reprofiling: Per a statement later released by the Finance Minister, “It is imperative that we profile our total debt stock of $30 billion which should help put us on a path of ‘Ghana beyond Aid’.

The General Bond Issue Process and Techniques

Fully Automated System for Issuing/Tendering (FAST)



Ghana currently uses a variation of the Fully Automated System for Issuing/Tendering (FAST) process to help automate and manage the tendering procedure of Government Securities.

What is ‘Book Building’

Per Investopedia, “Book building is the process by which an underwriter attempts to determine at what price to offer an initial public offering (IPO) based on demand from institutional investors. An underwriter builds a book by accepting orders from fund managers, indicating the number of shares they desire and the price they are willing to pay”.

What is Sovereign Debt Re-profiling

Debt re-profiling in grandma terms simply means that the debtor is trying to buy more time.  The term “re-profiling” has no clearly defined meaning but in the context of sovereigns, we understand it generally to mean an extension of maturities to allay concerns regarding the encumbered short-term liquidity situation of the issuer. Such a lengthening of maturities would constitute a default under our criteria because the sovereign debtor will pay less than under the original terms of the obligation.

A heavily indebted country has three options to ease its burden:

  1. It can ask (or tell) creditors to give it more time to repay
  2. It can cut the interest payments on its debts
  3. It can simply cut the total amount of money it owes (a “haircut”).

What is the IMF Debt Re-profiling Framework?

In June 2014, the IMF released a staff report considering a new approach to Fund’s “exceptional access” lending framework as it relates to sovereign debt restructuring. The report identifies key deficiencies in the Fund’s current lending framework – brought into stark relief during the euro zone crisis – and outlines a new, potentially improved, institutional approach to managing sovereign debt crises.

Established in 2002 and amended in 2010, the current framework stipulates that in cases where there is a “high risk of international systemic spillover effects,” a member’s debt sustainability does not have to be assured with high probability to gain exceptional access to IMF resources (IMF 2010: 20). The wisdom of introducing this “systemic exemption” in 2010 has since been scrutinized, as critics argue that it undermined the framework’s ability to constrain IMF lending decisions to the ultimate detriment of the Fund’s legitimacy and ability to manage future crises (Schadler 2013).”

Source:  New Rules for Global Finance


What is Private Placement of Bonds?

When most bonds are issued, they’re made available to the public, registered with the Securities and Exchange Commission, and traded on a public exchange. When a bond isn’t listed on a public exchange, it’s called private placement. When bonds are placed privately, they’re typically offered to a limited number of investors. Investors in privately placed bonds usually include large banks, mutual funds, or insurance companies.

Advantages Of Private Placement

One major advantages of private placement are that the issuer is usually not subject to the local regulators strict regulations for a typical public offering. With a private placement, the issuing company isn’t subject to the same disclosure and reporting requirements as a publicly offered bond. Furthermore, privately placed bonds don’t require credit-agency ratings.

Another advantage of private placement is the cost and time-related savings involved. Issuing bonds publicly means incurring significant underwriter fees, while issuing them privately can save money.

Similarly, the process can be expedited when done in a private manner. Furthermore, private placement deals can be custom-built to meet the financial needs of both the issuer and investors.
Disadvantages Of Private Placement

One major disadvantage of private placement is that bond issuers (in this case the government of Ghana) will frequently have to pay higher interest rates to entice investors. Because privately placed bonds aren’t assigned ratings, it can be trickier for investors to determine their risk. Hence the government of Ghana (GoG) must therefore be prepared to pay investors a premium in exchange for taking on added risk.

In addition, private placement limits the number and variety of investors the issuing party can reach, so selling bonds privately could be more challenging than doing so publicly. In some situations, private placement may cause an issuer to spend more time and money finding and attracting investors than a public offering would require, thus negating one of the primary benefits of avoiding a public listing.

Private-placement issuers could be forced to take extra steps to cater to their investors. For example, potential investors might demand additional equity from issuers or impose other such stipulations in exchange for their investment dollars.

Even if a company chooses to sell its bonds privately, it must still comply with certain regulatory rules for private placement. These rules apply to aspects such as the number and monetary value of bonds being offered and the methods used to advertise them.

One disadvantage of a private placement is that it significantly narrows the range of investors you can reach. This narrow range means your investors will probably need to have more capital to invest in your bonds. Because you typically can’t advertise on a wide scale and qualify for private placement, you may also need to expend more effort and expense to sell your bonds than in the typical public offering. A wide market will not exist for your bonds, so investors may also demand more equity in your company to protect their investments.

A reduced market for the bonds or shares in your business, which may have a long-term effect on the resultant value of the economy as a whole

Private placement, especially when structured, can have disadvantages in both the long and short term. If only a few investors are interested, and don’t want to invest a large amount of money it becomes difficult to raise the required amount of capital. Sometimes, private investors only buy in when the shares cost substantially less than the projected cost of the company, requiring you to sell more shares for the same amount of income. The reset feature of structured private placement allows private investors to gain additional shares, thereby reducing the number of shares you can sell to new investors, especially if you decide to go public in the future.

While a private placement may enable you to maintain more control than an IPO or venture capital investment, keep in mind that it requires you to give up some degree of ownership and control over your economy. New shareholders will have a voice in choosing your board of directors, and they may be able to vote on important decisions affecting the company. They will also have access to all your books and financial records.

So, is a private placement the right strategy for you and your company? If you are in search of capital to grow or expand your economy, it can be a cost-efficient way to raise funds that do not have to be repaid, unlike a commercial loan, which must be repaid to a bank or a lender with interest.

The trade-off, however, is the relinquishing of some control over your economy and the dilution of socio-economic equity. Most governments, especially of fast-growth economies, are counting on the future growth and appreciation of their economies as the long-term payoff for their years of sweat and blood. The future value of bonds that you part with in exchange for cash today, could end up being much more in the long term than the cost of debt financing.  Thereby doing citizens a disservice.

The buyer of a private placement bond issue expects a higher rate of interest than he earns on a publicly traded security. Because of the additional risk of not obtaining a credit rating, a private placement buyer may not buy a bond unless the bond is secured by specific collateral.

The Downsides of The Recent Treasury Bond Issue

Now that we have some sort of rudimentary understanding of this domain, let us dive into weeds to try to rationalize the causes of the recent uproar over this issue.   For purposes of correctness and clarity, I will try to use a STEP Analysis based approach to this review as much as possible.  I will also mention some of the potential professional level Ethical and Moral infractions that we are dealing with.

  1. Highest and biggest bidder: A company called Franklin Templeton (FT) is alleged to have purchased 95% of the bonds issued through Enterprise Group (an alleged business interest of the current Finance Minister and the current Attorney General).
  2. The Enterprise Group: Seeing that The Enterprise Group mainly markets itself as an insurance company amongst other things, it is unknown, as to what kind, and amount of, if any, financial reward that it generated from the transaction.  It is alleged that, they served as the local intermediaries for FT, during this transaction.
  3. Conflict of interest:  Per the Merriam Webster dictionary, “a conflict of interest is a set of circumstances that creates a risk that professional judgement or actions regarding a primary interest will be unduly influenced by a secondary interest.”  Primary interest refers to the principal goals of the profession or activity, such as the protection of clients, the health of patients, the integrity of research, and the duties of public office.
    Secondary interest includes personal benefit and is not limited to only financial gain but also such motives as the desire for professional advancement, or the wish to do favors for family and friends. These secondary interests are not treated as wrong in and of themselves, but become objectionable when they are believed to have greater weight than the primary interests.
    Conflict of interest rules in the public sphere mainly focus on financial relationships since they are relatively more objective, fungible, and quantifiable, and usually involve the political, legal, and medical fields.
    It is therefore important to note that, if Enterprise Group received any pecuniary benefits in the form of, fees or gifts, for their services in this transaction, it could violate US, International as well as even local Ghanaian investment laws regarding Conflict of Interest (COI).
  1. Conflicting roles: The FT’s Trevor G. Trefgarne is an executive member of both Enterprise Group (EG) as a principal shareholder of Enterprise Group as well as an executive of FT.
  2. Personal and professional associates to the new Finance Minister: The Enterprise Group belongs to Ken Ofori-Atta, his wife, Dr. Angela Ofori Atta, and Keli Gadzekpo.
  3. International connections of biggest buyer: Franklin Templeton Investment Limited is an American global investment management organization founded in 1947. It has an extensive global presence, including offices in 34 countries and clients in more than 170 countries.  This mere fact requires FT to at least abide by U.S. Securities investment laws regarding conflict of interest and investment laws regarding due diligence.
  4. Listed board member of EG: The firm has renowned investors as it Board of Directors. In an unedited semi-annual report of Franklin Templeton Investment limited dated December 31, 2016; Honorable Trevor G. Trefgarne was named as one of the five Board of Directors of the firm. He was described in the report as Chairman of Enterprise Group Limited (a Ghanaian firm). Enterprise Group has 10 Board of Directors. Principal among them are Mr. Keli Gadzekpo, Group Chief Executive of Enterprise Group; Dr Angela Ofori Atta, wife of Finance Minister Ken Ofori Atta who doubles as Director of Enterprise Insurance, a subsidiary of Enterprise Group etc.
  5. Current attorney general also implicated: Enterprise Group also has Minister of Justice and Attorney General, Gloria Akuffo [and Dr Angela Ofori Atta as non-executive members of the firm]. Hon Gloria Akuffo is/was Director of Enterprise Life, a subsidiary of Enterprise Group (it is not clear whether she has resigned or not).
  6. Databank not implicated so far: In 1990, Finance Minister Ken Ofori Atta together with Mr. Keli Gaadzekpo (CEO of Enterprise Group) and others founded Data Bank. However, as at the time of going to press, it is unclear what role if any, that these actors and their company might have played in the transaction.
  7. Previous bond issues were more transparent: The former finance minister Seth Terkper’s (the former finance minister) last bond was issued at 9% coupon rate for 10years. It was well publicized and discussed at least 3months prior to issue. The NPP said the bond was too expensive for Ghana. Now Ken Ofori-Atta comes in and issues bond offerings in secret. So far they seem to be resisting requests to make all transactional information related to the deal public.
  8. Insufficient due diligence: It is also alleged that complete due diligence was not followed in the execution of this transaction. Apparently, the Finance ministry was very tight-lipped about the sale even after it was completed. The Finance minister only mentioned on Friday that, one of the biggest global investors was involved without disclosing the name.
  9. Lack of sufficient disclosure and professional standards: It may seem to the learned eye that proper due diligence, investment disclosure laws, and ethical behavior guidelines were violated.
  10. Knowledge of the Law: It is a requirement of U.S. and Ghanaian investment laws, for all investment professionals to be fully aware and to comply fully with the strictest laws and standards regarding all transactions. Judging by the pronouncements of even some of the government cabinet members, who by the way were supposed to review such large sum government transactions long before they happen, everything suggests that not even the local laws were followed properly.
  11. Political crime: The political crime infractions contain both crimes by the government and crimes against the government. Political goals motivate political criminals. If during the investigation, it is proved that perhaps, due diligence and strict observation of the investment laws that apply were willfully undermined by any of the political actors involved, it could constitute a political crime and provide subsequent grounds for full criminal investigation and prosecution.
  12. S Securities fraud laws: Securities Fraud (18 U.S.C. Section 1348). Securities fraud covers a broad range of illegal activities, all of which involve investor deception or the manipulation of financial markets. Examples of securities fraud include Ponzi or pyramid schemes, investment schemes, broker embezzlement and foreign currency fraud.
  1. Insider trading: If you trade stock or other securities using information that is not available to the public, you can be prosecuted for what is commonly known as “insider trading.”
  2. Potential Breach of Fiduciary Duty: A fiduciary duty is an obligation to act in the best interest of another party. In this case, the Finance Minister, the Governor of the Bank of Ghana, et al. owe Ghanaians a duty and a solemn responsibility to act in their best interest. It should however be noted, that at this early stage of this investigation, there seems to be a strong case to be made for potential breach of fiduciary duty against the Minister and the current administration seeing that, even some current cabinet ministers and insiders are coming out to suggest that, they were not informed about the deal beforehand. and secondly, the ministry is refusing to provide full disclosure as far as the price discovery approach and all supporting documents for this deal. Suspected Market Manipulation: Investors or regulators must not engage in practices that distort asset prices or artificially inflate trading volume with the intent to mislead market participants either for personal or political benefit.
    The minister should move quickly to disclose the complete information regarding the trade for the public to be able to properly access whether this happened.
  3. Violation of national investment laws: The policy governing bond issuance set out in the debt management strategy of the country and convention adopted and practiced by the Bank of Ghana in line the Loans Act and Article 181(5) of the 1992 Constitution provide very clear transparency guidelines. This requires approval by cabinet of such transactions together with the bond prospectus. This is to be presented to Parliament in line with Article 181(5) of the constitution. It is when approvals are given by parliament that the Finance Minister will go to market for the bond. Where related parties of the stature of the finance minister, the advisor to the finance minister and board members of friendly entities are involved and were to buy the lion share due diligence, disclosure and transparency are critically required. As it is now Parliament should begin an enquiry into the deal and report the matter to US regulators. Credit rating agencies and IMF should also be interested.
  4. By-passed Cabinet Approval: The policy governing bond issuance set out in the debt management strategy of the country and convention adopted and practiced by Bank of Ghana in line the Loans Act and Article 181(5) of the 1992 Constitution, provides very clear transparency guidelines.
    This requires approval by cabinet of such transactions together with the Bond prospectus. This is to be presented to Parliament in line with Article 181(5) of the constitution. It is when approvals are given by parliament that the Finance Minister will go to market for the bond.
    Hence, in a situation whereby we find out post-factum, that the Finance Minister and board members of friendly entities, have managed to secure themselves a lion’s share without sufficient due diligence, disclosure and transparency being done leads many inquiring minds to wonder. Whether, something untoward transpired.
  5. Fair Dealing: Public officials must deal fairly and objectively with all investors when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities. This is an internationally recognized best practice.  And hence when there is collusion of any sought, it raises eyebrows.  And it also makes the markets inefficient.
  6. Record Retention: Public officials must develop and maintain appropriate records to support their investment analyses, recommendations, actions, and other investment-related communications with clients and prospective clients.
  7. Disclosure of Conflicts: Government officials must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer. Members [and Candidates] must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.
  8. Priority of Transactions: Investment transactions for the nation must have priority over investment transactions in which a Member of the government is the beneficial owner.
  9. Referral Fees: Public officials involved must disclose to their citizens, and institutional investors, as appropriate, any compensation, consideration, or benefit received from or paid to others for the recommendation of products or services.


For the record, I will like to note that i have always personally admired Ken Ofori-Atta for all his hard-work and accomplishments.  However, citizens of the country need to be informed of the facts.  Seeing that i am just beginning my forensic economic investigations into this incident, the most profound observations that immediately occur to me are the following:

  • Conflicts of interest: The company that represented the single largest investor in this transaction was also personally affiliated to the current Finance minister through his wife and personal business partner.
  • Political crime: An argument could be made that the actors involved in this transaction, who are all mostly affiliated with the current administration, engaged in this ruse, to help them strengthen their political interests, at the expense of the citizens and other parties.
  • Potential Breach of Fiduciary Duty: The Finance Minister, the Governor of the Bank of Ghana, et al. owe Ghanaians a duty and a solemn responsibility to act in their best interest of the people always. This is a standard requirement for capital markets worldwide.  Hence, if at some point in this investigation, it is discovered that they did in fact redirect some government bonds to cronies or took any form of gifts, that could constitute grounds for their dismissals, and further criminal prosecution.
  • Insider trading: Because this bond transaction doesn’t seem to have been fairly valuated as per current market conditions and comparable valuations, it is likely proper due diligence might not have been conducted.
  • Financial crime and malpractice: And since it it likely that Enterprise Group made money from this transaction, that will in itself, constitute a textbook case of Financial crime and malpractice.

Kindly note that this is a working draft.  I will continue to add evidence as time goes on.  I will expand upon it as time permits.






About Anang Tawiah

About the author :: Anang Tawiah is a New York City based Management Consultant specializing in Investment Risk and Technology Strategy. He continues to guide many Blue chip companies and Governments as a Business and Technology Consultant. Please direct all follow up questions, concerns, request for speaking engagements and presentations regarding my articles and research to my Facebook Page listed below. You can read more of his analysis or reach him for further professional consultations and or guidance at: // Email: // Follow me on Wordpress: // Follow me on Facebook:


  1. Pingback: Economic Crime Analysis: Ghana’s Recent $2.2B Bond Sale, Templeton Global Bond, Enterprise Group, et al… | Anang Tawiah

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