Capital gains tax threatens investor confidence – GSE MD
By Praisebell Rosemond Larbi
Investor confidence in Ghana’s capital market is facing renewed pressure following the reintroduction of the capital gains tax on securities, a policy that market operators say could undermine the country’s competitiveness and discourage both local and foreign investors.
Although the Ghana Stock Exchange (GSE) remains one of the best-performing markets globally this year, its Managing Director (MD), Abena Amoah, has warned that the new tax regime risks reversing recent gains by making Ghana’s market less attractive compared to others in Africa.
Speaking during a panel discussion at the 14th Ghana Economic Forum in Accra, Ms Amoah said many companies have become reluctant to list on the Exchange or undertake fresh capital-raising efforts because of the rising cost of doing business and structural inefficiencies in the economy.
“We need a sustained macroeconomic environment. That’s what potential issuers tell us, that interest rates are still too high. Bank loans above 20 per cent are not competitive, power costs are too high, and we still need to improve productivity,” she explained.
According to her, the high cost of capital and energy challenges continue to weigh heavily on business confidence even as trading volumes and investor participation show early signs of recovery.
She noted that a stable and predictable tax environment is essential to maintaining investor interest and encouraging new market entrants.
“There’s still a lot of discussion around the tax framework that enables and encourages more investment, stressing that policy predictability is key to attracting sustainable capital inflows,” Ms Amoah said.
The GSE Managing Director further revealed that the Exchange is engaging government and policymakers to reconsider aspects of the new tax regime.
She further noted that Ghana is now among the very few African markets that impose capital gains tax on securities, a position that could push investors toward more favourable jurisdictions.
“Even on the GSE, we are struggling with Ghana now implementing capital gains tax on investors who invest in securities, making us one of the few markets in Africa with this policy. It makes our market less competitive compared to these other markets,” Ms Amoah emphasised.
She reiterated that a vibrant and competitive capital market is critical to Ghana’s economic transformation, providing financing for corporate expansion, infrastructure development, and government projects.
“We will continue to engage policymakers to ensure the market remains attractive so investors can finance economic development whether in infrastructure, corporates, or government financing,” the GSE Managing Director added.
