REMARKS DELIVERED BY HON. MONA HELEN K. QUARTEY, DEPUTY MINISTER OF FINANCE ON THE OCCASION OF THE LISTING OF IZWE LOAN LIMITED GHS80 MILLION M MEDIUM TERM NOTE ON THE GHANA ALTERNATIVE MARKET (GAX), 14TH NOVEMBER, 2014, GHANA STOCK EXCHANGE (GSE) TRADING FLOOR AT 9:30AM
The Chairman of the Ghana Stock Exchange (GSE)
The Director General of the Securities and Exchange Commission (SEC)
The Managing Director of GSE
The Deputy Managing Director of GSE
The Chairman of IZWE Loan Limited
The Managing Director and Management of IZWE Loan Ltd
Members of the media,
Distinguished invited Guests,
Ladies and Gentlemen
1. It is a great pleasure to be part of this landmark event. Today IZWE Loan Limited is listing GH¢ 80 MILLION MEDIUMTERM NOTE on the Ghana Stock Exchange (GSE). This is a remarkable achievement for us as policy makers and key stakeholders in the transformation of our financial sector. This listing is the first local currency-denominated corporate bond and an opportunity for us to use the newly launched GAX.
2. Let me welcome IZWE Loan Ltd to the bourse and congratulate the Board, Management and staff for this important stride in the business. Special thanks to Lead Arrangers and all other related institutions for this transaction.
3. I have been informed IZWE Ghana is part of a Pan-African Financial Services Group operating in Zambia, Kenya and South Africa. The Board and Management deserve special commendation for efficiently and effectively managing the company and issuing this bond in Ghana. We expect that this step will not only broaden the investment scope and diversify their portfolio with those in the fixed income market, but also lead to an enhanced liquidity of corporate bonds on the Exchange.
4. IZWE Loan Ltd listing on GAX today is a clear demonstration that the company is poised to meet the high expectations of investors and the general public. The Company will now be expected to set higher targets including higher returns on investment, profitability capital adequacy for itself. I therefore urge IZWE Loan Management and employees to continue with their zeal in providing quality services and improved financial performance to the satisfaction of all its Stakeholders.
5. It is also noted that IZWE is currently serving over 35,000 customers in Ghana with loan book of about GH¢90million. The proceeds from the Notes are to be used to finance IZWE loan activities and manage its liquidity situation. Let me advise the managers of the fund to use the funds judiciously and for the set objectives. In this way, IZWE will be contributing immensely to the development of our capital market and the economy in general.
Distinguished Ladies and Gentlemen
6. Government’s strategic direction is to expand opportunities for all and ensure an accelerated socio-economic transformation in partnership with the private sector. Through various reforms in the financial sector over the years, progress has been made in expanding the range of financing options for businesses seeking to raise capital. We are of the view that these options still remain narrow, dominated by the banking system which generally is only able to offer short-term financing and a limitation for medium to long-term financing.
7. We therefore need to harness all resources towards the achievement of more robust, deeper and broader financial system. Developing the capital market will enable us attract the financing needed for critical investment for both Government and the private sector. In this regard, Government is working assiduously with other stakeholders to place the corporate bond market on a sustainable growth path.
8. A vibrant capital market will help close the infrastructure gap, create wealth, unleash the creative potential of the people, inject efficiencies in the operation of public utilities and enterprises, and turn ideas into marketable products of global dimensions. The capital market as part of the financial system is therefore critical for our economic development process.
9. The importance of Small and Medium Enterprises (SMEs) and their contribution to economic growth, social cohesion, employment and community development is acknowledged worldwide. This sector continues to play a vital role, as a tool for the economic empowerment of the poor. In Ghana, SMEs account for over 90% of business enterprises and continue to contribute largely to the creation of new jobs.
10. It is estimated that SMEs provide about 85% of manufacturing employment, account for over 90% of existing businesses and are the primary driver for GDP growth. Broadly, SMEs contribute to economic diversification, employment creation, provision of basic goods and services, and generation of exports and tax revenues for our development process.
11. It is gratifying to note that Government’s efforts in establishing the alternative Market, (GAX) has begun yielding positive results. The focus of GAX on start-ups and existing enterprises with the potential for growth is a step in the right direction. In addition, listing on the Exchange also bring enormous benefits. Let me note a few below.
• Initial listings increase a company’s ability to raise further capital;
• The Exchange facilitates transparency in transactions of listed securities in a competitive condition;
• Reinforce the culture of equity ownership across the wider Ghanaian public;
• Expand investment options for all Ghanaians; and
• Improve corporate governance
12. We therefore urge all other businesses to follow the foot prints of IZWE Ghana to use GAX as a medium to raise capital to finance new projects, undertake expansions, diversifications and for acquisitions.
13. Government will continue to support this alternative market through various collaborative initiatives to improve infrastructure and create a conductive environment that will attract investors. The Government will also continue to issue and list bonds with a view to providing an important benchmark for other securities offered in the market.
14. Currently, all indications signal a potential for growth in the securities market. The over subscription recorded in recent past securities issued both in domestic and global markets testifies to the huge potential in the sector that can be mobilized and channeled to fuel our economy. We therefore need to intensify our education and awareness campaign for potential investors and issuers as well as the general public.
15. I wish to reiterate that the capital market and for that matter the Exchange remains the most appropriate source of capital and a trading platform for all businesses seeking to raise long term financing at a relatively lower cost for their operations. We need to rely on this alternative financing route to complement the financing from the banking system. In this way, the private sector will be able to play its role in the development process more meaningfully.
16. Once again, I commend all stakeholders for this significant achievement in our financial sector development process. To IZWE Ghana, congratulation on a successful bond listing, and I wish you all the best as you forge ahead with your business.
Thank you all