Ghana’s SEC boss harps on expansion, development of sub-region’s bourses

To sustain the current level of economic growth and attract both domestic and foreign investment in the West African Sub-region like Nigeria, there was need for the region to expand, develop and modernize its capital markets.

The Director-General, Ghana Securities and Exchange Commission, Dr Adu Anane Antwi made this submission during the PEARL Awards yearly public lecture held in Lagos recently.

The Director-General, while presenting a paper titled’ ‘Integrating West African capital markets: Issues, challenges and prospects’ argued that most African stocks exchanges are however, at their early stages of development, battling with several constraints that hampers their operational growth.

He described West African stock exchanges as ‘undeveloped’, noting that such narrow and illiquid market has contributed to low level of investors’ participation in the region.

This, according to him, was evident in the low market capitalisation, few listed companies, low liquidity and limited range of investment products that characterised these markets.

Antwi identified the major challenges facing these exchanges to include: political instability in some economies, high volatility in economic growth, macroeconomic uncertainty, and liquidity constraints.

Others are underdeveloped trading and clearing, settlement and depository structures, limited domestic investor base and limited market information.

“Most African stocks exchanges are however,at their early stages of development and face several constraints. Most capital markets in emerging countries like those in West Africa have been described as narrow and illiquid, and discourage investors from investing in these markets

“Although some achievements have been recorded in terms of market capitalization, volume and value traded and the number of companies listed on the various exchanges in the West Africa sub-region, including the alternative exchanges, West African stock exchanges are still undeveloped.”

According to him, one of the solutions that would go a long way to deepen and create more efficient capital markets is regional capital market integration.

He explained that capital market integration is where a number of countries work together to form a common financial market with common rules, cross boarder access and increased opportunities for their citizens, investors and stakeholders.