Government plans to offload shares in some State Owned Enterprise (SOEs) on the Ghana Stock Exchange for Ghanaians to own part ownership of the companies.
At the moment, only five out of the 39 state enterprises pay dividends to the government - a situation the Finance Ministry described as a drain on the economy.
The Securities Industry Law, which gives legal backing for the move, has received cabinet approval, Finance Minister, Dr Kwabena Duffuor has said.
At the opening of the 2012 capital market week in Accra, Dr Duffuor said the law would provide the legal framework for private participation which would raise funds for the recapitalisation of those enterprises through joint ventures.
Some of the SOEs, Dr Duffuor said, were cash trapped, without any profits while government continued to invest funds in their continued operations.
The Finance Ministry has consequently scheduled a meeting with the boards of such SOEs where the proposals for listing on the stock exchange would be tabled for discussions.
He said the Ghanaian economy regained stability in the third quarter of this year after initial hiccups earlier on in the year. According to him, the economy had stabilised and called for innovative ways to generate the necessary long-term resources required for accelerated growth.
He said the government was committed to growing the capital market to serve as an avenue to mobilise private funds from national savings to be channeled into productive sectors of the economy. This, he said, would lead to the participation of local investors to guarantee long term financing mechanisms that government can tap into.
The Finance Minister bemoaned the growing ignorance of financial language among many Ghanaians. He said many Ghanaians were still ignorant about some of the basic macroeconomic subjects as the capital market and the securities exchange terms.
He said the ministry was partnering some of the country’s development partners to undertake serious education to improve the situation.
He was hopeful that the move would empower consumers to better understand and manage financial risk and take advantage of increasing competition in the financial sector towards a stronger economic growth.
An economist, Dr Kwame Pianim, who chaired the event, noted that Ghana’s economy held enormous promise which required more investment through the capital market.
He rallied the youth especially to acquire the habit of savings and investment.
He asked the government to revisit the repealed section 140 of the securities industry law, 1993, PNDCL 333. The section, according to Dr Pianim, provides that “The sector minister may give the commission directions, general specific character as to the exercise of the commission’s function; and it shall be the duty of the commission to give effect to any such direction”.
According to him, the existence of such a law was a discouragement to the investing public, especially the foreign investor who expects decisions to be taken on purely commercial basis.
“The time has come to move the rules and practices of our securities regulatory framework to first world standards,” he stated.
The Chairman of the Securities Exchange Commission (SEC), Prof E.V.O Dankwa, said the theme for this year’s capital market week was: “the Capital Market; An Investment Avenue for Your Secured Future Financial Well-being” was to prepare young people on the need to invest positively towards their future.
Story: Justice Baidoo