Bawumia calls for protection of investors from systemic risks

Dr. Mahamudu Bawumia, vice president, has encouraged West African capital markets to create regulatory measures to protect investors from systemic risks.

He opined that the adoption of regulatory laws would prevent arbitrariness, increase risk sharing, and spur more competition to achieve tangible results.

Tuesday in Accra, Ghana, Vice President Bawumia provided the advise while opening the 2022 West Africa Capital Markets Conference.

He stated that the moment was right for Africa to construct and grow robust financial markets to assist finance the supply of public goods, provide cash for entrepreneurs, and promote the development of the private sector.

The two-day biennial conference brought together members of the Economic Community of West African States (ECOWAS) to discuss and strategize ways to improve the capital market.

It was organised by the West Africa Securities Regulatory Association (WASRA) on the theme: “Deepening and Strengthening the Capital Markets in West Africa through Effective Regulation”.

The Vice President believed that technical regulatory initiatives that adhered to solid prudential principles and practices would guarantee the success of capital market integration.

Therefore, he urged the WASRA and its members to make the most of the tools provided by the International Organisation of Securities Commission in order to construct coherent supervision frameworks and well-established communication channels between nations.

Dr. Bawumia stated that the infrastructural aspect of capital market integration requires WASRA to support the member jurisdictions in the implementation of its standards through a variety of activities.

The Vice President ascribed the world economy’s “disruptive impacts” to the COVID-19 outbreak and the Russia-Ukraine conflict.

Noting that the global pandemic had ushered in new business models, products, and services based on technological advancements, he urged for a thorough rethinking to assure effective financial oversight.

“There is a tremendous opportunity for increased competitiveness, interoperability, operational efficiency via cost savings, and enhanced risk management,” he added.

Dr. Bawumia also advocated for the expansion of economic cooperation ties in order to unleash prosperity and alter the narrative of a continent rich with both natural and people resources, but still dependent on foreign aid.

To alter the narrative, capital markets should integrate and use technology that efficiently address regulatory and compliance needs.

Dr. Bawumia urged the WASRA to take use of the Pan African Payment and Settlement System (PAPSS), which was introduced this year, to facilitate the integration process by facilitating the payment of transactions in local currency among nations in the West African subregion.

He urged them to take advantage of the African Continental Free Trade Area to eradicate poverty and boost long-term growth.

In a speech delivered on his behalf, Minister of Finance Ken Ofori-Atta stated that Ghana’s capital market began operations more than three decades ago with nine companies.

As of March 2020, the Ghana fixed income market had approximately 38 listed companies with a market capitalisation of over GHc64 billion on equity bars and GHc187 billion on outstanding securities.

From January to March 2022, the total trading volume was over 280 million shares valued at GHc300 million, an increase of 39.68 percent and 96.77 percent, respectively.

“At the end of 2020, when COVID-19 was biting hard, the stock market recorded one of its most successful years, with volume trades of 695 million shares, the second largest in the 30-year history of the exchange, and value trades of 575 million, the third highest,” Mr. Ofori-Atta stated.

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