Ghana should sell its stake in Vodafone Group Plc (VOD)’s local unit and list shares on the Accra bourse, the world’s best-performer this year, to encourage other companies to follow, the Securities and Exchange Commission said.
“While it is the desire of government for companies to raise capital through the stock exchange and expand on their operations, government must be seen as taking the first step,” Director General Adu Anane Antwi said at a conference in the city today. Ghana retained 30 percent of the state telecommunications company when it was sold to Vodafone in 2008 for $900 million.
The West African nation, which has the region’s second-biggest economy, is seeking ways to boost listings on the Ghana Stock Exchange to take advantage of growing investor demand that’s pushed the composite index up 52 percent this year, according to data compiled by Bloomberg. The gauge added 0.1 percent to close at 1,829.06 today.
The government should divest state-owned companies through the market, Antwi said. Statutory bodies such as the Volta River Authority, which oversees power generation in Ghana, and the Ministry of Roads and Highways should be made to raise 25 percent of their loan needs, which are otherwise taken from banks or international institutions, from the local capital market, he said.
Mining, banking, insurance and oil and gas companies should be compelled to sell shares on the Ghanaian bourse after they’ve been operating in the country for a certain number of years, he said.
AngloGold Ashanti Ltd. (ANG)’s shares last changed prices on the Ghanaian bourse on Aug. 27, while Golden Star Resources Ltd.’s stock has held at 2.75 cedis since September 2011. Accra shares in Tullow Oil Plc, which operates the Jubilee oil field, have dropped 11 percent this year.
Government support is needed for plans to offer municipal bonds to pay for development projects, Antwi said.
“The Accra Metropolitan Assembly, Tema Municipal Authority and Kumasi Metropolitan Assembly all can raise money through bonds for projects,” he said. Tema has Ghana’s biggest port and Kumasi is the country’s second-biggest city.
Ghana needs to spend $2.3 billion a year on infrastructure including roads, water and energy, Peter Quartey, head of the economics department at the University of Ghana, said at the conference. Investment is about $1.2 billion yearly, he said.
The government is drafting a Securities Industry Bill to replace the existing law and bring Ghana in line with international standards, Deputy Finance Minister Cassiel Ato Forson said. The government supports plans by the Ghana Stock Exchange to demutualize and become a profit-seeking entity and to integrate with other West African markets, he said.
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