Revolutionising Ghana's Financial Services Landscape

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Revolutionising Ghana's Financial Services Landscape


Financial Services: Unleashing the Potential of Ghana's Economy

Ghana's financial markets

Established on November 26, 1990, the Ghana Stock Exchange (GSE) is a governing body for companies trading on the GSE.

The GSE is governed by the Securities Industry Law 1993 (PNDCL 333) and its amendments.

To ensure that Investors, Brokerage Firms, and Listed Companies on the GSE are all on equal ground, the Securities and Exchange Commission (SEC) establishes rules and laws. Its purpose is to protect and encourage investment on the Exchange. The SEC is also responsible for regulating unit and mutual trust companies.

The Global Stock Exchange (GSE) is home to 27 companies, 10 brokerages, 5 mutual funds, and 1 unit trust.

Commercial banking in Ghana

To bolster BoG's regulatory and supervisory roles, the Banking Act 2004 (Act 673) has replaced the Bank of Ghana (BoG) Act 2002 (Act 612).

To encourage healthy competition, BoG formally introduced the Universal Banking Business Licence (UBBL) in February 2003. New banks should have paid-up capital of 70billion (excluding statutory reserves) and existing banks should have a minimum net worth of 70billion (excluding statutory reserves) in order to operate under the UBBL. Banks must maintain primary reserves equal to 9% of their daily cedi and forex deposit base with BOG, and secondary reserves equal to 35% of their daily deposit base in cedi denominated assets.

As part of its reserve requirements, the Government of Ghana (GoG) refinanced its short-term liabilities into long-term loans in 2001 with the introduction of Government of Ghana Index-Linked Bonds (GGILBs). BoG mandates that banks keep 15% of their deposits in GGILBs. The GGILB is being replaced by fixed or floating rate bonds for years two and three.

Standard Trust Bank Limited is the newest of the 19 banks currently operating in the formal banking sector under various banking licenses.

Each year, PwC releases a Banking Survey that can be used by professionals, analysts, and financial/economic researchers in the field. Read the most recent survey by clicking the link below.

The Ghanaian Insurance Market

There is a lot of room for development in the life and non-life insurance sectors of the Ghanaian economy. The expected passage of the new insurance bill, which will call for the separation of Life and Non-Life businesses and an increase in the capital requirement to 7billion, has increased competition in the Life market.

Some distinctive features of the Ghanaian market persist.

  • Constant expansion as more and more policyholders opt to shoulder their own losses.
  • Stronger rivalry for a wide variety of consumables.
  • Expansion into the non-life and life re-insurance sectors.
  • Insurers are constantly on the lookout for new ways to meet the needs of customers whose concerns aren't being addressed by the current offerings, and product development remains focused on the core property/casualty market.

As a result of issues like underpricing policies and deteriorating bad debts, most insurance firms are losing money on every policy they write.

The Ghana Reinsurance Company was established because insurance companies required a means to legally cede 20% of their premiums as reinsurance in order to spread their risks and mitigate the effects of potential catastrophes.

In particular, the introduction of a common currency for the West African Common currency on July 1, 2005, bodes well for the future of the insurance market. The potential for business expansion into neighboring countries is greatly enhanced by this.

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