Clear economic direction needed for growth –GSE MD

By Daniel NONOR, Accra

The Managing Director of the Ghana Stock Exchange, Ms. Abena Amoah has emphasised the urgent need for Ghana to establish a clear economic direction which positions the country as a trade or a distinct industrialization hub, each requiring distinct strategies and investments.

“We have a Ministry of Trade and Industry, but we must decide; are we a trade country or an industrial country? The two paths require different approaches,” Ms. Amoah stated,

Speaking at the just ended Ghana Economic Forum in Accra Ms Amoah explained that if Ghana chooses to become a trade hub, especially within the context of the African Continental Free Trade Area (AfCFTA), it would require significant infrastructure investments to support this model.

“Ships and planes will come here, leave goods, and depart empty, and we’ll develop infrastructure and make investments to support this model,” she explained.

However, she cautioned that if the country opts for industrialization, it would face challenges such as imported inflation and a dependence on foreign currencies, particularly the U.S. dollar.

“If we are an industrial country, we will approach things differently, but we must then deal with imported inflation because no one needs the Ghana cedi, so we will keep demanding dollars to maintain a trade economy,” she stressed.

Ms. Amoah also addressed the current state of Ghana’s economy, drawing attention to the slow growth the country has experienced over the past decade. 

Making reference to data from the Ghana Statistical Service, she noted that “In 2013, our nominal GDP was GH₵29.81 billion. By the end of 2023, our real GDP, adjusted to 2013 numbers, was GH₵50.64 billion. So, in 10 years, our economy, measured in 2013 terms, has only grown from about 30 billion to GH₵50 billion. Is that real growth? In my opinion, it’s not.”

She further emphasized that this slow growth is being felt across the board, with businesses struggling under the weight of high interest rates and inflation.

“This sluggish growth is what we’re all feeling, and companies here are feeling it too,” she noted. “High interest rates and high inflation are impacting everyone. We cannot live sustainably under these conditions, which is why discussions about the actions of the Bank of Ghana and the Ministry of Finance are crucial.”

She also focused on the challenges facing Ghana’s capital markets and the need for strategic policies to foster growth. She stressed the importance of capital markets in driving national economic development, describing them as an essential tool for transformation.

“Employment and return on investment make healthy returns to the investors in that business, or to the investors who put their money in there,” she said. “So, capital markets are such an important tool for national economic development and transformation.”

Ms. Amoah stressed that the capital markets, which include stock exchanges, insurance companies, banks, and pension assets, are crucial for attracting investments from both domestic and international sources.

“The private sector, whether domestic, regional, or global, draws investments from this sector. If we don’t take advantage of and carefully consider how we use the capital markets, we will not go far,” she cautioned.

Furthermore, she emphasized  the impact of the macroeconomic environment on the capital markets, particularly how inflation and currency fluctuations affect investments.

She stressed that the growth of Ghana’s capital markets hinges on strategic policy-making.

“The Stock Exchange was established because the government realized that to facilitate the next phase of our economy’s growth back in 1989, we needed to formalize and grow our capital markets, and strengthen the banking sector, insurance, private capital formation, etc. It is policy that drives growth—policy around what incentives to give companies to come to the market, and policies like privatizing our pension funds.” Ms. Amoah also highlighted the importance of creating an economic environment conducive to business growth. “Without policies that support business growth—when interest rates are at 30% and the cedi is depreciating—companies cannot come to the market to raise even corporate bonds because the government is paying almost 30% on Treasury bills. We need to get the economic framework right,”