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"Jubilee Oil field is the most important project in the history of Ghana," says one firm. This sums up the continuing buzz that the country experiences as the young oil industry expands....

"Jubilee Oil field is the most important project in the history of Ghana," says one firm. This sums up the continuing buzz that the country experiences as the young oil industry expands.

One commentator says there is an "aura of activity" in Ghana. The capital markets, which for cultural historical reasons continues to be dominated by equity rather than debt, last year saw the biggest ever IPO on the Ghana Stock Exchange (GSE) with the listing of Tullow Oil. The listing has been successful and given a vital boost to the GSE, and since Tullow's listing the Volta River Authority has also announced its intention to list.

The secondary markets have also seen some activity. Rights issues by banks to raise capital in advance of the new capital requirement deadline for 2012 subsided in the latter part of 2010 and into 2011, but the market did see Ghana International Bank and Guinness Ghana Breweries complete rights issues.

Big ticket M&A is rare in the market, although there are regulator mandates in oil related work and the telecoms sector saw some big transactions, namely American Tower Corporation acquiring the communication tower business of a Ghanaian telecom company. There were also a series of large financings to the Ghana Cocoa Board, and Ghana's Petroleum Company and for the Ghana Eastern Corridor project, Railway Construction and Modernisation Project and some real estate developments, most notably a new Kempinski Hotel in Accra. The government also has a list of projects for development in water resources and power as part of its manifesto pledges, with money coming from international financial institutions.

However, the activity is deceptive and Ghana relies on foreign financing. Domestic deals, with domestic financing and domestic players, remain small. The GSE is not generally that active and, say some lawyers, it fails to draw investors. "Ghana is not very attractive to the stock market, there could be a lot more listings... there isn't enough movement in prices on the stock exchange so money instead goes in government treasury bills at an agreed rate of interest".

Corporates rely on bank lending, but the size of the local banking sector market, added to the lack of a serious debt capital market (which saw only one true deal: Stanbic Banks MTN programme), means finance must often come from abroad. Banks are "not so good for long term borrowing, so what happens on project financings were long term debt is needed the money comes from foreign entities and banks, and also on the large deals it is foreign banks doing the lending".

Firms continue to expect local banks to consolidate to meet capital requirements, but mergers have so far been second to rights issue. The market did see the sale of Amalgamated Bank to the Bank of Africa. On the legislative side, the government is still quite far off with the new oil bill.

The legal market has seen a group of younger firms spring up in the gap left by the incumbent players, which has also had an effect on law firm culture. According to one partner "recruitment is now quite competitive and market average pay has gone up... we pay market rate, match other firms, we have a chef for the workers, we give them mobile phones, we pay them when they go back to education". Bentsi-Enchill Letsa & Ankomah continues to dominate the market.