Regulators in financial sector urged to engage more with investors
Mr. Kojo Addae-Mensah, Group Chief Executive Officer of the Databank Group, says regulators in Ghana’s financial sector must be open to engage potential investors, who seek to offer new and innovative products in order to become competitive.
According to him, there was enough capital in the outside market, with investors looking for where to invest that capital, however the capital market in Africa was very competitive, and Ghana being a relatively small economy, had to put in measures to ensure that it did not drive away potential investors.
Mr. Addae-Mensah was speaking during a panel discussion on ‘Fueling a competitive economy, the role of a world class financial sector’, at the Ghana Economic Forum 2018, which opened in Accra on Tuesday.
The Forum is on the theme: “Building a competitive economy for sustainable growth”.
He said while potential investors were not interested in the small ticket investments that Ghana could offer, others offered products that the Ghanaian market was not ready for, which led regulators to push away such investors.
Regulators, he said, should rather engage such potential investors.
Citing the example of Real Estate Investment Trust (REIT), a product aimed at helping gather funds for the real estate sector, he noted that Ghana did not currently have the guidelines and regulations for the REIT to go throughout the asset management community, with the exception of HFC, which had a special dispensation from Parliament to run its own REIT.
However, the Securities and Exchange Commission, has been engaging with a South African REIT company who wanted to come into the Ghanaian market but found the market not ready.
“They engaged the SEC and thankfully the regulator did the right thing and didn’t push them away. We’ve all been working together to come to middle ground to see how best it can work,” he said, stressing that, such engagements with investors seeking to introduce other products or derivatives was very important.
Mr Addae-Mensah also noted that the size of transactions done in Ghana was also small for investors seeking to invest. This, he said, called for consolidation in the local market so that investors could get bigger ticket investments in the economy.
He noted that players in the Ghanaian financial services sector had to look seriously at merging and consolidating, in order to be able to do bigger transactions, saying that, the reluctance on the part of players in the capital market to do so was a mindset issue that will change, but with time.
The panel discussed several issues bordering on how to make the financial services sector competitive.
Mr. Samson Akligoh, Acting Director of the Financial Services Division of the Ministry of Finance, noted that, efforts to strengthen Ghana’s financial sector had been heavily focused on the banking sector, especially in terms of building up that sector but needed to move beyond just being a politically stable economy to getting a niche for Ghana in the financial sector in the sub region.
This, he noted, required some infrastructure, which was not yet in place, to give Ghana a competitive advantage.