Government should divest its stakes in state-owned enterprises through the stock market to deepen the market and broaden the local investor base, the Securities and Exchange Commission (SEC) has said.

Estimates show that less than one percent of the Ghanaian working population is involved in the capital market.

SEC Director-General Adu Anane Antwi said government should list its minority shares in companies such as Vodafone Ghana, and encourage the Volta River Authority (VRA) as well as metropolitan assemblies to sell bonds on the capital market.

“Government should consider using the stock exchange as the main medium of divesting state assets, with the fundamental objective of deepening the capital market and broadening the local investor base of the Ghanaian economy,” he said at the first Capital Market Conference in Accra last week.

“In Ghana, some SOEs have been privatised through the stock exchange. However, this has not been enough; more privatisation through the stock exchange must be done. I hope that the Agricultural Development Bank (ADB), Ghana Re, National Investment Bank (NIB) and other SOEs to be privatised in the future will be done through the stock exchange.”

Many emerging economies have consciously used strategies such as the privatisation of SOEs through public listing to get a sizable proportion of their population directly involved in the capital market.

Professor Peter Quartey, Head of the Department of Economics and Senior Economist (ISSER) of the University of Ghana, said in order to bridge the infrastructural gap in the country using the capital market, government needs to promote massive public involvement in the market.

“In the USA, Japan and other advanced countries, over 90 percent of the working population are involved in the capital market. In India and Malaysia, close to about 30 percent of the population are involved in the capital market whereas in Ghana, it is below one percent. Hence, there is need for massive education to encourage people to participate in the capital market.

“Government’s privatisation policy objectives should be aimed at developing the capital market. Government should collaborate with the SEC to develop the over-the-counter trading (OCT) market because its potential is enormous.”

He also advocated the introduction of diaspora bonds as new instruments that can be introduced on the capital market towards financing infrastructure.