More open accounts with Central Securities Depository

In 2015, 116,260 investors opened new accounts with the Central Securities Depository (Ghana) Limited (CSD) to invest in treasury bills, bonds and/or shares.

This means that a total of 846,269 investor’s accounts have been opened at the depository for debt and equity investments.

The Chief Executive Officer of the depository, Mr Stephen K. Tetteh, told the Daily Graphic in Accra that the present figure showed that more people were investing in the securities market.

While commending the development as a positive step, Mr Tetteh said: "it was still a drop in the ocean," given the size of Ghana’s population.

With an adult population of more than 12 million people, the CEO said it was unimpressive that under one million people had opened investor accounts with the CSD.

He explained that local investors mostly invested in short-term securities such as the treasury bills and notes unlike the foreign investors who come in for the long-dated instruments.

Capital market education

Given that investment is key to the growth of every economy, Mr Tetteh said the country needed to step up education on the need for people to invest.

These investments, he said would help make capital available for future expansion of the economy.

"For now, the participation we are seeing in the capital market is not what we expect but it is also as a result of the lack of public education," he said.

He, however, commended the Ministry of Finance, the Bank of Ghana and the Securities and Exchange Commission (SEC) for instituting various educational schemes aimed at exposing people to the rudiments and benefits of investments.

These education schemes, he said, should target the youth in a manner that would attract them to save and invest.

"We should go down to the schools and build the momentum from there. The capital market holds the key to development but we cannot feel the impact if people do not invest," he said.

"Generally, people hold idle funds, meanwhile some entrepreneurs elsewhere will need funds to also invest. So, when you invest, you provide them capital to work with while you earn returns on your money," Mr Tetteh added.

Ensuring value for investment 

Until 2014, the country operated two depositories; the Bank of Ghana (BoG) and the Ghana Stock Exchange (GSE) depositories, which handled debts and equity respectively.

However, following an understanding reached between the BoG and the GSE, the two depositories were merged, resulting in the formation of the CSD.

The new depository is now tasked with the responsibility to provide the requisite infrastructure that will provide improved security and customer satisfaction for investors, a duty it is executing through the recent introduction of the Millennium Central Securities Depository System (MCSD).

The system is to replace the earlier ones that have been in existence for years.

The MCSD is part of initiatives aimed at ensuring efficiency, security and confidence that will attract investors into Ghana's market, Mr Tetteh said.

"I think we are the first in West Africa to introduce it and the whole idea was to give investors a credible system that they could trust and be comfortable dealing with," he said.

With the system now in place, the CEO said investor appetite in the market would increase, resulting in high patronage of the various investment instruments.