Ken Ofori Atta, Chairman of the Databank Group and Kwaku Sakyi-Addo, CEO of the Telecoms Chamber have both stated that enticements, not compulsion are better ways of encouraging multinationals to list on the Ghana Stock Exchange.
Mr. Adu Anane Antwi, Director-General of the Securities and Exchange Commission (SEC), has been leading calls for government to make the licencing of multinationals in certain critical sectors depending on their agreement to list on the local stock exchange after a set number of years in operation however, Mr.Sakyi-Addo, whose industry has been targeted by proponents of this local content policy for the stock exchange, has warned of the disadvantages of pressuring companies to list.
“You ought to be careful about using compulsion when you are dealing with investments…If you want to drive companies toward a certain direction; you use incentives rather than compulsion. Once you provide the incentives, you leave them to take their business decisions. If it’s good business case, they will go for it. When we use compulsion, we will end up driving away investments.”
Amid complaints that not a single telecoms company is listed on the GSE, Mr. Sakyi-Addo said there’s a false impression out there that telecom companies are making windfall profits, hence people want to have a stake in them.
“We must be careful about creating the impression that once you invest in a company that is listed you’ll be able to make profit. There are many listed companies that are not paying any dividends to shareholders.
“We have to realise that in business you don’t only have an upside; there’s also a downside. There are ways to do it without coercion. Some of these include a sound macro-economic system, ability to transfer their proceeds outside easily, and some tax-breaks which could encourage them to do that,” Mr Ofori Atta said
Even though government already provides a tax incentive in the form of reduced corporate tax rate of 22 percent for listed companies instead of the general rate of 25 percent, Mr Ofori Atta said perhaps more can be done to encourage more businesses to list.
He noted that looking at the free environment in which businesses operate in the country, force is difficult; but the government and its regulatory bodies can create an environment which leads to the companies’ interest being fulfilled by getting listed.