Ghana Stalling on Securities Watchdog Thwarts Funding Plans

(Bloomberg) -- Plans by Ghanaian companies to raise capital are stalling as the West African nation's securities regulator continues to operate without an appointed board more than six months after the previous committee's term ended.

The Securities and Exchange Commission of Ghana is unable to permit at least two corporate bond sales and process an “uncountable” number of broker-dealer and fund manager applications as approvals may only be granted by a fully constituted board, Jacob Aidoo, head of issuers at the regulator, said in an interview in the capital, Accra. The previous SEC board dissolved in January following the swearing in of President Nana Akufo-Addo.

HFC Bank Ghana Ltd. will wait until September before it asks shareholders to vote on a 50-million cedi ($11.4 million) rights offer, Benjamin Dzoboku, general manager for finance and strategy at the Accra-based lender, said by phone. The bank wants to raise funds before an expected revision of capital requirements by the Bank of Ghana later this year, he said.

“The non-existence of an SEC board is a problem,” Dzoboku said. “We are only hoping that the board will be in place by then.”

Stocks Surge

The broadest gauge of the Ghana Stock Exchange surged by more than a third this year as accelerating economic growth and lower interest rates boost companies' earnings potential. No GSE-listed company has sold shares since Access Bank's Ghana-unit completed an initial public offering in December.

The GSE Composite Index was little changed at 2,251.91 at 10:50 a.m. in Accra.

“Putting up boards take a lot of time,” Deputy Information Minister Kojo Oppong Nkrumah said by phone. The “SEC board will be ready within the shortest possible time. The president is working on it.”

The SEC is also not able to perform its watchdog duties over companies that are already listed, Aidoo said.

“Should something happen on the market right now that calls for the suspension or revocation of a license, the commission cannot bite,” he said. “Management cannot make such decisions, it is only the board that can.”

To contact the reporter on this story: Moses Mozart Dzawu in Accra at mdzawu@bloomberg.net.

To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Robert Brand