John Gartchie Gatsi

Capital Structure and Profitability in Ghanaian Banks

We studied capital structure and profitability in Ghanaian banks using panel data methodology was employed. Capital structure theories have been utilised to provide the theoretical basis for the work. The study covered 14 banks over the period 1997-2006. it was observed that 87% of the total capital of banks in Ghana is made up of debt. Of this, 65% constitute short-term debts while 22% is made up of long-term debts. This has re-emphasised the fact that banks are highly levered institutions and also highlights the importance of short-term debts over long-term debts in bank financing in Ghana. This finding agrees with previous studies such as Abor (2005) and Amidu (2007) in stressing the importance of short-term debt in firm financing in Ghana. This significant negative relationship between bank size and profitability suggests that larger banks tend to exhibit lower margins and is consistent with models that emphasize the negative role of size from scale inefficiencies.

Information Asymmetry and Gift Tax in Ghana

Gift tax has been in the Ghanaian Tax Laws since 1975 but collection from this source is very limited. Information asymmetry is a major problem since many potential recipients of taxable gifts are not aware of the tax. Double taxation is now a serious debate when discussing gift tax. Tax education can serve as the vehicle to improve the understanding of the tax and enhance compliance by Ghanaians.

Downstream Oil and Gas Merger Performance of Total Ghana Limited

Mergers and Acquisitions are used to foster expansion in all industries in the world. However, Total Ghana Limited dominates the merger activity in the Ghanaian downstream oil and gas industry. Using the DuPont Model developed in late 1919, the merger indicates value to shareholders but the emerging upstream oil and gas industry may increase the competition to reduce the potential hold on the market by Total Ghana Limited.

Oil Revenue Collateralisation in Ghana

This paper provides comparative analysis of policy aims and possible effects of oil revenue management in Ghana. The proposals in selected sections of the Petroleum Revenue Management Bill of 2010 provide the basis for the paper. Collateralisation of oil revenue allows the country to use future revenue from oil as security. This has been used in countries such as Italy, Mexico, Brazil, and Argentina among others for various economic reasons. It is clear the motivation for Ghana to collateralised future oil revenue is not the same as that of Argentina and Mexico hence any attempt to discuss the issue must be done in context. Ghana’s case is not to prevent currency or financial market crisis but to revolutionalise investment in development infrastructure. The Petroleum Revenue Management Bill when finally promulgated into law will help mitigate the reservation against collateralisation. Prudent management and effective governance and accountability structures may fortify the current policy desire to accelerate social and economic infrastructural development. In addition, an effective natural resource management should focus on mitigating the possibility of The Dutch Disease. Exports from previously competitive sectors such as agriculture must not be sacrificed.

Institutional structures and financial market development in Africa

Abstract Our paper examines the relationship between institutional structures and the level of financial markets development in Africa. Our paper contributes to the extant literature by using other financial market development variables—ease of access to loans and venture capital availability—that have not before been used to analyzed how institutional structures influence the level of financial markets development in the context of Africa. We employ a two-step generalized method of moment estimator with corrected standard errors to examine this. We demonstrate that a high-quality institutional environment is relevant in explaining ease of access to loans and venture capital availability in Africa. Based on these results, our paper argues that good institutional structures could help stimulate the level of financial markets development in Africa. However, to attain this feat, African governments need to strengthen institutions through effective enforcement of laws to foster compliance in a specifically definite manner-by fashioning out costs for non-compliance