Ken Ofori-Atta and Rev. Daniel Ogbamey Tetteh displaying the CMMP
GHANA’S FIRST-ever capital market master plan (CMMP) was yesterday launched by Finance Minister Ken Ofori-Atta in Accra.
The CMMP, billed to serve as the blueprint for developing the country’s capital market over the next ten (10) years, was developed by a working group drawn from key stakeholders in the financial sector.
It will serve as an essential component of the Securities and Exchange Commission (SEC)’s mandate of regulating, innovating and promoting the growth and development of an efficient, fair and transparent securities market which will protect the integrity of investors and the market.
Mr. Ofori-Atta indicated that improving access to long-term finance would be a key enabler for achieving the objectives of the GH¢100 billion Ghana Cares ‘Obaatanpa’ programme which has been launched to stabilise the economy.
“Our appreciation goes to the UK’s Foreign, Commonwealth and Development Office (FCDO) which financed the development of the plan, capital market working group established by the Ministry of Finance and the SEC, and the World Bank for their immense contribution during the development of the CMMP,” he noted.
Market capitalisation currently stands at GH¢53 billion since the Ghana Stock Exchange was established in 1990.
The capital market in Ghana has made significant strides in its development over the past two decades but it is still small relative to other emerging markets. It is dominated by government domestic debt, with total value outstanding at GH¢115 billion as at December 2019, representing 33 per cent of GDP from just GH¢19.4 billion in 2015, representing 11 per cent of GDP.
Total market capitalisation has however remained relatively flat over the last five (5) years, unfortunately, total market capitalisation to GDP took a nosedive from -32 per cent in 2015 to -16 per cent in 2019.
Yet, domestic market capitalisation to GDP has seen a marginal increase over the last five years from 6.2 per cent in 2015 to 6.5 per cent in 2019. In terms of values, total market capitalisation remained relatively flat from GH¢57.1 billion in 2015 to GH¢56.8 billion in 2019.
In a remark, Rev. Daniel Ogbamey Tetteh, Director General of the SEC, stated that the capital market was the best place to raise ‘patient capital’, which was critical for financing growth.
Highlighting the benefits of the capital market for stakeholders, he said it would for example, enable the creation of jobs for ordinary citizens as businesses raised capital while for business owners, he stated that it would facilitate the expansion of their businesses, and create a viable avenue for investors to deploy surplus funds.
Dr. Ogbamey Tetteh added that the capital market would be critical to the growth aspirations of Ghana.
“The vision of the CMMP is in pursuance of a deep, efficient, diversified and well-regulated market with a full range of products attractive to domestic and international investors. It will be achieved on the back of certain four pillars.
“These include improving diversity of investment products and liquidity of securities markets (to enhance investor participation and improve market liquidity; increasing the investor base and promoting innovation and product diversification; strengthening infrastructure and improving market services (to improve market integrity and accessibility); as well as strengthening regulation, enforcement and market confidence,” he said.
BY Samuel Boadi