GSE needs over 10 million dollars to develop - Amoa

Accra, April 19, GNA - Ghana's capital market needs over 10 million dollars to develop, Mr Yeboa Amoa, Managing Director of the Ghana Stock Exchange said on Wednesday.

The amount, if realised, would enable the stock exchange to embark on law reforms, develop products, automate operations and expand activities. It would also enable the market to develop its human resource, promote business and regulate structures.

Mr Amoa made this known during a familiarisation tour of the bourse by Ms Eudora Quartey, Deputy Director-General of the Securities Regulatory Commission (SRC). Some commissioners of the SRC accompanied her.

Mr Amoa said the market needs more donor support, adding, "if helped, the Ghana capital market can be a vital key to unlocking the prospects that undeniably are hers".

As a way of improving legal processes of the bourse, Mr Amoa said it is necessary that outdated laws such as the Exchange Control Law of 1961 and the Companies Code of 1993 were removed.

He said new laws on automation, bankruptcy, charge on chattels and trust laws must be passed to enhance the market. There is also the need to remove delays and abuses in the judicial processes, establish specialist courts and introduce new models of dispute settlement of issues affecting the operation of the market.

Mr Amoa, who briefed the delegation on the "Role of the GSE in the Capital Market", said the Exchange holds a lot of promise and the success of the Vision 2020 depended on it.

This is because the needed long-term capital for the private sector to expand businesses could be obtained on the stock exchange and the promotion of the market would create jobs, wealth, increase savings and investments and provide liquidity that would enable the nation to compete globally.

Mr Amoa added his voice to the call on government to address the crisis in the financial market saying, "domestic savings are very meagre and something must be done for this to increase four-fold for 2020."

He noted that government's debt has crowded out the private sector while scarce lending is limited to preferred clients and is only for the short term. "These constraints hamper the growth of firms and do not allow them to acquire new technologies or employ more workers or support trade receivables.

"In order for the economy to move, there is, therefore, the need to address the difficulties and constraints affecting the creation of the capital market, its operations and survival."

Mr Amoa called for a vibrant macro-economic policy and management that would check inflation, interest rates and eliminate government budgetary deficits by the control of expenditures, enhancement of revenue collection and the plugging of tax and customs duty holes.

He also urged government to address, among other issues, the exchange rate problem, national incomes and remuneration policy, handle divestitures quickly and ensure foreign currency availability.

There is also the need for the introduction of new financial products such as the establishment of a bond market for the sale of government, corporate and municipal bonds.

The Ghana futures project, mutual funds, unit trusts and the securing of assets must be promoted to make the capital market more active. Mr Amoa said these would ensure the Exchange's contribution towards the achievement of the goals of Vision 2020, government's blueprint for socio-economic development, that aims at reaching a per capita income of 1,400 dollars from 400 dollars.

Ms Quartey on behalf of the commissioners thanked the managers of the Exchange and congratulated them for achievements so far attained.