Capital Markets
From The Report: Ghana 2022
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The authorities have worked in recent years to increase the depth and breadth of the country’s capital markets, introducing fixed-income, commodity and small business-focused exchanges. Although trading activity was suppressed in 2020, as investors shifted from equities to comparatively lower-risk options such as government bonds, it experienced a healthy rebound in 2021 as the wider economy entered the recovery stage. The sector faces several challenges – including low equities trading, a lack of awareness among the public about the benefits of capital market investment and constrained innovation. However, the government is working on outreach and education initiatives, and introducing new products to bolster participation.

This chapter contains interviews with Ekow Afedzie, Managing Director, Ghana Stock Exchange; and Kwabena Boamah, Managing Director, Stanbic Investment Management Services.

Articles from this Chapter

Overview

Gaining ground: The authorities work to capitalise on the rebound in 2021 to diversify instruments and attract new participants
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The Ghanaian authorities have worked in recent years to increase the depth and breadth of the country’s capital markets, introducing fixed-income, commodity and small business-focused exchanges. The Covid-19 pandemic brought slower trading activity and lower market capitalisation as investors shifted from equities to comparatively lower-risk options such as government bonds. However, both picked up towards the close of 2020 as the economy moved into the recovery stage. While the sector faces several…

Interview

Unlocked returns: Ekow Afedzie, Managing Director, Ghana Stock Exchange (GSE), on facilitating investment and accessibility
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Interview:Ekow Afedzie To what extent did the Covid-19 pandemic impact liquidity in Ghanaian capital markets? EKOW AFEDZIE: The GSE was able to maintain operations after the outbreak of Covid-19 largely because automated systems had already been implemented on the trading floor. As a result, brokers and other stakeholders were able to continue to participate in the capital market uninterrupted. Indeed, technology helped us overcome the challenges presented by the pandemic, enabling the exchange…

Analysis

Weather the storm: Measures taken to ease the impact of the Covid-19 pandemic
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The Covid-19 pandemic has severely affected economies, businesses and consumers across the world, especially in terms of crisis management, supply chains, liquidity and operations. Central banks and the wider banking community were among the first to experience these disruptions. Countries hit hard by the pandemic have taken aggressive fiscal and monetary policy measures to address the challenges posed by the health crisis, including cuts in policy rates. After Ghana recorded its first case of Covid-19 on March 12, 2020, the Bank of Ghana (BoG) – the country’s central bank – announced policy measures to cushion the economy from the effects…

Analysis

Next-generation solutions: A robust digital ecosystem will facilitate the emergence of new innovative financial products and boost inclusion
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Ghana has made strides in recent years to deepen and broaden its digital financial services ecosystem. The government has prioritised the segment as key to bolstering financial inclusion, as well as ensuring business continuity in the event of another crisis such as the Covid-19 pandemic. These efforts pre-date the pandemic: the Electronic Transactions Act of 2008 outlined the regulation of electronic communications and related transactions. The Payments and Services Act of 2019 was another major step towards strengthening digital payments. It amended and consolidated laws related to payment systems and services, and strengthened the regulations…

Analysis

Responsible investing: Financial players increasingly consider options in line with environmental, social and governance (ESG) principles
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The importance of combatting climate change has become increasingly clear in recent years, and sectors across the economy have worked to diversify their offerings to deal with these challenges. For capital markets, sustainable financing has been key. In November 2019 the Bank of Ghana and the Ghana Association of Bankers launched the country’s Sustainable Banking Principles and Sector Guidance Notes, a first step towards developing the segment. More recently, in May 2021 the Securities and Exchange…

Interview

Growth potential: Kwabena Boamah, Managing Director, Stanbic Investment Management Services, on reforms and private equity investments
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Interview:Kwabena Boamah What is Ghana’s economic recovery outlook? KWABENA BOAMAH: The outlook is mixed. An important factor to watch is Ghana’s fiscal gap. Government expenditure, already fuelled by the pandemic, must continue to rise to improve infrastructure and fund efforts to bridge the gap between low- and middle-income earners. However, Ghana’s revenue mobilisation is not strong enough to cover expenditure, with tax income accounting for less than 15% of GDP. To address this,…