DDEP presents opportunity to revise economic model — Abena
The Managing Director of the Ghana Stock Exchange, Abena Amoah, has said that the recently concluded Domestic Debt Exchange Programme (DDEP) presents a silver lining to revise the country’s economic model.
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She said while the financial and investment space had suffered some major knocks with regard to trust and confidence as a result of the DDEP, the country could not allow the crisis to go to waste.
“We need to see this as an opportunity to revise our economic models for a prosperous future,” she stated.
Ms Amoah was speaking at the Graphic Business/ Stanbic Bank breakfast meeting which was held on the theme: ‘Domestic Debt Exchange Programme: lessons and implications for how to invest’.
She said the DDEP, despite its negative effects had also presented an opportunity to reset the country’s interest rates and investment returns regime to affordable and sustainable levels for all.
She mentioned that the single digit interest rate on government bonds and securities as it prevailed now meant that government debt service levels would fall, freeing up revenues that could be used for investments in critical social and economic infrastructure.
She said this also meant that the private sector had the chance of accessing affordable capital.
“The silver lining is here, we must grab the opportunity DDEP gives us for businesses to finance operations at much lower and sustainable levels,” she stated.
Investing in private sector
The Managing Director also noted that the single digit interest rate regime on treasury instruments also meant that investors must look for additional returns by investing in the private sector.
“We cannot fund our lifestyles by getting guaranteed risk free returns from government. Like every other country, it is investments in the private sector that give that additional return we are all looking for.
“By investing in the private sector, which is our real engine of growth, we will be meeting the objectives that we have set for ourselves,” she stated.
Transparency and accountability
Ms Amoah said for confidence to return to the industry, it was critical that government, private institutions and individual investors conducted themselves in a transparent and accountable manner.
She said investors needed to think about diversification.
“We need to go back to the basis of investments by diversifying our portfolios to minimise risk and exposure. When the returns being offered are too good to be true, even when they are supposedly risk free, think about them again,” she advised.
Behaving properly
Also speaking at the meeting, a non-Executive Director of Databank MFund Limited, Dr Dan Seddoh, said to restore investor confidence in the capital market, players in the industry must “behave properly.”
“We are still a developing country and not most of us are educated, and just as when I am sick I go to the hospital and expect the doctor to do the right thing, investors also expect players in the capital market to do the right thing,” he stated.
Dr Seddoh also pointed out that the Securities and Exchange Commission, which is the regulator, had not done enough to protect the interests of customers.
He said the regulators had not done enough to protect customers and they must be told in the face to up their game.
“Government is too big to protect; customers must be protected. Regulators need investors and government can't look after all of us, we need to re-align, we need to develop the capital market properly, regulators can't regulate character but they should regulate conduct,” he said.
Protecting investments
The Director General of the Securities and Exchange Commission, Rev. Daniel Ogbarmey Tetteh, for his part, challenged investors to take steps that would help protect their investments against risks.
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He said there was the need to understand the investment landscape to be informed about how to invest their money wisely.
He called for improvement in financial literacy to boost investor confidence in the country.
"We need to protect ourselves to minimise the impact of risk on investment by understanding the investment landscape to be informed about how to invest," he stated.