Legon

The Securities Regulatory Commission which is to help develop Ghana's capital markets should become operational by the end of July this year, Mr Kwame Peprah, Minister of Finance, said today. The commission, he said, will help to protect investors and complement efforts at bringing additional portfolio investments and making the country an attractive emerging market. Mr Peprah made this known in a speech read for him at a forum to mark the 19th annual "Management Day" organized by the School of Administration of the University of Ghana, Legon.

The day, instituted to link up the University and Industry, is under the theme "Financial Markets and their Impact on Ghana's Economy." The flags of the UN/World Bank, European Union, Canada, USA, France, Belgium, Denmark, Norway and the Ghana Stock Exchange (GSE) were hoisted in recognition of their assistance to research and training. Mr Peprah noted the role and performance of the GSE in the country's financial and capital market and said the government will continue to promote the development of the sector. "Government is committed to pursuing the development of the remaining financial infrastructures in order to sustain the credible financial and capital market being developed."

Mr Peprah spoke about the non-bank financial institutions project which seeks to strengthen institutions and introduce instruments that will help mobilise domestic savings to be invested in the market. The GSE is receiving further assistance under this project to enable it to establish a clearing settlement and a securities depository system, and assume additional role in helping to develop the capital market. The Minister stressed the important role of financial and capital markets in attracting direct private capital which has become "mobile and daring" due to the shrinking level of bilateral and multilateral assistance to the nation.

Mr Peprah said because the size of the country's market is small, it could be easily influenced. There is therefore the need for caution in the bid to develop it to attract more foreign investments to complement indigenous investments and savings. Citing the Mexican experience which suffered a serious set-back due to a massive capital flight, he said the small size of the Mexican market made it very vulnerable.