The Ghana Securities Industry Association has stressed the need for good corporate governance at the launch of the 2018 Capital Market Week at the Ghana Stock Exchange in Accra on 22nd October 2018. The launch was held on the theme “The Role of Good Corporate Governance in the Transformation of Ghana’s Capital Markets”.
Speaking to the media, the Executive Secretary of GSIA, Madam Miriam Dsane said that the capital market week celebration has been set aside to create awareness on capital market as the avenue for creating financial wealth and accessing of long term capital which are necessary for Ghana’s economic growth and development. She said that the increasing size of the current market requires robust regulation and strong industry leadership by way of good governance and best practices hence the chosen theme.
Madam Dsane said “at the end of the 2018 3rd Quarter industry’s Asset under Management (AUM) was over GHC40 billion, approximately and that is 20 per cent of the total Gross Domestic Product (GDP).” She also added that “stock market capitalization stands at GHc 66 billion.
Mr Paul Ababio, Deputy Director General of the Securities and Exchange Commission said that the market week will address issues such as coming public for Small and Medium Scale Enterprises (SMEs), transitioning plans for SME owners among others. He said that it is the hope of the SEC to see more SMEs approach them on how to raise capital, enhance corporate governance and more.
He said “investments are critical to wealth creation, national development, trade and creation of employment”. He added that the capital market plays a key role in inter mediation. He said that Ghana’s market is over reliant on short term financing, with few companies offering shares in a transparent and credible manner. Therefore, listing or obtaining private equity partners are ways that firms, whose owners are about to retire, can support business transitioning and management, he said.
In a media interaction, he said that the GSIA will work with the SEC during the week’s celebration on corporate governance while taking into consideration the current occurrences in the banking sector and its effects on investors. He said that a more aggressive education campaign will be employed to educate the public with the use of social media to target the youth.
Mr Ababio also pointed out that there are few businesses offering bonds on the fixed income markets. He said “bonds are the next frontier in deepening Ghana’s capital market. The over-reliance on fixed deposits by financial institutions also highlights the fact that we, technically, can only manage or engage in limited long-term lending, thus, playing a restricted role in sustainable development of the sector.”
He added that the SEC is committed to the growth and development of Ghana’s capital market and in support of this they have circulated draft documents that will strengthen the governance framework. Two of these key documents, he said, are the Conduct of Business Guidelines and The Corporate Governance Framework for Listed Companies. He said that these will support the ideas of strong corporate governance.
The President of the Ghana Securities Industry Association, Mr Emmanuel Alex Asiedu said that there are many issues plaguing the industry such as lack of education, lack of proper investment culture necessitating the chosen theme. He said that corporate governance is the fuel that feeds the engine for economic growth especially for the capital market. He hoped the event will bring together industry players and other stakeholders to deepen the debate on corporate governance and how it can generate broader economic growth and wealth for the country.
Until 2016, the SEC has been responsible for the Capital Market Week. However, this responsibility has been transferred to the GSIA. The GSIA is an industry association of firms regulated by the Sec with a current membership of 133 firms, comprising Investment Advisors, Fund Managers, Broker-Dealers, Registrars, Custodians, a Stock Exchange, and a Depository.