The Chairman of the Securities and Exchange Commission (SEC), Professor E.V.O. Dankwah, has encouraged the government to look within to raise capital for development.
He further urged government to re-examine its privatisation policy to ensure that Ghanaians are considered first when state assets are being divested through the stock market.
Professor Dankwah said by so doing, more securities or financial assets would not only be made available to Ghanaian investors, but also help to strengthen the capital markets.
Professor Dankwah said this in a speech read on his behalf at the launch of the Capital Market Quiz on July 18, 2014.
He also pointed out that there had been an over-subscription in Initial Public Offers (IPOs) while there had also been a tremendous increase in public participation in collective investment schemes over the years; a situation which had led to the demand for securities now far outstripping the available supply.
He therefore called for the creation of more financial vehicles to absorb the increasing demand to exploit the vast resources of funds to develop the country.
Long-term financing still limited
The Director of the Financial Sector Division of the Ministry of Finance, Mr Joseph D. Chognuru, also stated that the option to raise long-term financing remained limited in the country.
He said the banking system only offered short-term financing with its attendant risk of maturity mismatch.
“We need to work together to ensure that the capital market and especially the corporate bond market is placed on a sustainable growth path with a view to providing alternative source of financing to businesses and reducing the over-reliance on traditional bank financing,” he said.
He also noted that the dwindling of funding from external sources called for innovative ways of mobilising resources internally as a country.
He said the development of the domestic capital market was one sure way to address the economic transformation process.
“The capital market, if fully utilised, would provide enormous benefits including access to relatively cheaper sources of long-term capital towards our industrial growth and infrastructure development,” he added.
Capital Market Quiz
The capital market quiz is a competition which will be organised for senior high schools in September, with 22 schools from five districts in Accra taking part.
The quiz is aimed at spreading financial education to the youth of the country.
The Director General for SEC, Mr Adu Anane, said the competition was SEC’s latest public education programme which would be organised annually.
He said the competition would be organised across the entire country from next year.
Mr Adu Anane said investor education was not part of SEC’s mandate but it was undertaken to educate the investors because he believed a “well-informed investor is a well-protected investor.”
