The maiden Capital Market Master Plan (CMMP) is expected to boost equity market capitalization to GDP ratio and improve equity market turnover to market capitalization. According to Finance Minister, Ken Ofori- Atta, the CMMP has a target of raising the equity-market-capitalization-to-GDP ratio from about 15% to 50% at the end of the 10-year period. Similarly, it will help improve equity-market-turnover-to-market-capitalization from about 1% to 15%.
Also, he stated that the CMMP has the potency to increase liquidity turnover/nominal value of outstanding securities on the fixed income market. The Minister expects the ratio to improve over the 10-year period from about 42% to 70%.
Moreover, the minister highlighted that the new plan will increase the breadth of the capital market in Ghana. According to Mr. Ofori-Atta, the plan will increase asset under management in collective investment schemes from about GH¢3billion to about GH¢ 38 billion. It will also increase those under managed account from GH¢19 billion to about GH¢28 billion.
Meanwhile, Mr Ofor-Atta indicated the plan would position Ghana’s capital market as a ready access to cheaper finance option to businesses. This, he said, will boost production and services and make businesses more productive. He indicated that a strong capital market has a rippling effect on job creation and improving standards of living. He added that it will enhance savings and investments and ultimately reduce poverty.
Capital Market Master Plan (CMMP)
The Securities and Exchange Commission (SEC) on Monday launched its maiden Capital Market Master Plan (CMMP). This plan will serve as the blueprint for the development of the capital market in Ghana for the next 10 years. It is part of the vision to develop Ghana’s capital market. At the launch, Mr. Ofori-Atta indicated that the Capital Market was an essential driver for economic growth and development in the country.
However, the evolution of the country’s financial sector had not aggressively placed the essential industry at the heart of financial sector development over the decade. He noted that Ghana’s Capital Market has numerous opportunities for growth.
He believes strengthening the private fund machinery will help SMEs and new entrepreneurs have access to funds. This will help support their growth agenda and ultimately reduce the level of unemployment in the country.
Meanwhile, Mr. Ofori-Atta indicated that when the plan is well executed, it will benefit all Ghanaians. As such, he called on all and sundry to help transform the capital market to a more diversified, efficient, and liquid market. He said this makes the capital market an attractive destination to both issuers and investors.
Also, Rev Daniel Ogbarmey Tetteh, the Director-General of SEC, said the Plan formed part of the country’s efforts to build a robust and sustainable long-term financial market. He said the Commission expected the implementation of the Plan to meet the financing needs of the country’s growing economy. He believes it will also create investment opportunities for wealth creation.
Improving diversity of investment products
Moreover, SEC believes the Plan will improve diversity of investment products and liquidity of securities markets. It will also Increase the investor base whilst promoting innovation and product diversification.
Furthermore, the deputy director of SEC , Mr Ababio said the plan will strengthen infrastructure and improve market services. He believes the plan will help improve regulation, enforcement, and market confidence.
Mr Ababio said the implementation of the Plan would result in growth of businesses and increase in production. He highlighted that per the plan, SEC expects to raise GH¢ 6billion per year in equity in the 5-year target (2024). The target for the 10-year (2029) is GH¢ 15.2billion.