The nation’s economic and financial development future will come into focus today, as the foremost gathering of financial and economic minds – The Money Summit (TMS) 2023 – comes off in the nation’s capital.
The summit’s third instalment will see the domestic business community’s highest echelon attempt to make sense of the current economic landscape, and proffer workable solutions and areas for public-private collaboration.
Under the theme ‘Africa’s Robust Financial Sector: The Catalyst for sustainable economic growth’, these seasoned professionals will enhance public awareness on significant policy measures in the sector; brainstorm and provide solutions to identified challenges and seek feedback and input from critical stakeholders; and offer contributions aimed at significantly shaping government policy, aiming to position the financial sector as a leader in the country’s recovery efforts.
True to tradition, the event will feature two sessions. The first will see Country Manager at AZA Finance, Nana Yaw Owusu Banahene, join banking royalty to discuss the topic ‘From competition to collaboration: how fintech is shaping the future finance’.
This comes as fintech has cemented its position as a critical component in the financial inclusion agenda and is poised to play a super-sized role in domestic and continental economic transformation.
Already, enhanced payment and settlement platforms – led by mobile money – have recorded remarkable growth over the last decade; driving up financial inclusion, especially for women, in the process.
In 2022, the West African region, led by Ghana, exceeded the market pioneers in East Africa and rest of the world in terms of its proportion of registered mobile money accounts. Its global share rose from 11 percent in 2021 to 33 percent by end of the year. The region’s 290 million registered accounts contributed US$277billion in transactions.
Domestically, last year the mobile money segment recorded a cumulative transaction value exceeding GH¢1trillion for the first time – confirming its position as the digital finance segment leader.
Although there was a decline from GH¢90.5billion in March to a low of GH¢77.4billion and GH¢77.2billion in June and July respectively, due to enforcement of the E-levy, recovery began in August. In December, the segment recorded GH¢112billion – a 47.2 percent increase over the GH¢82.9billion recorded in December 2021.
This significantly outperformed cheque transactions, which amounted to approximately a quarter of mobile money transactions at GH¢254.4billion. Meanwhile, Internet banking transactions were worth GH¢80.3billion.
Other digital payment platforms such as E-zwich, Gh-link and Ghipss Instant Pay (GIP) recorded transaction values of GH¢14.64billion, GH¢551.3million and GH¢58.7billion respectively.
This has coincided with a significant increase in capital raised by fintech startups in Africa, which has been described as a testament to the growing importance of digital financial services on the continent. The digital financial industry has demonstrated steady growth since 2016 in terms of transaction volume and financing, led mostly by the Big Five of Nigeria, South Africa, Rwanda, Kenya and Egypt, with Ghana historically coming in sixth position.
However, last year the Ghanaian fintechs saw deals worth over US$400 million occur across 47 deals. This was almost eight times higher than the country achieved in 2021, resulting in it being ranked fifth in funding raised on the African continent.
However, unicorn status – a US$1billion valuation – continues to elude Ghanaian fintechs; but there is a growing consensus that increased partnerships with banks could see this remedied in the short- to medium-term.
The panel will be exploring the expected benefits of this collaboration, and be completed by top persons from the banking fraternity – including banking chiefs from UMB Bank and GCB Bank respectively, Nana Benneh Dwemoh and Kofi Adomokoh.
Others are Chief Executive Officer-Ghana Association of Banks (GAB), John Awuah; Head of Retail Banking-FBN Bank, Allen Quaye; and Head of Business Enablement-Stanbic Bank Ghana, Marian Amartey.
The session will be moderated by the Vice president-Ghana Fintech and Payment Association, Richard Nunekpeku.
The second plenary will have as its focus ‘Africa’s Robust Securities Industry: The Role of Insurance, Pensions, Fund Managers and Other Market Players’, and comes at a time when the domestic Securities Industry has come under intense scrutiny: on account of outstanding payments to customers of defunct fund management firms from 2018; the effects of enforcing the mark-to-market valuation on debt instruments in 2022; as well as the infamous domestic debt exchange programme (DDEP).
These events have sown seeds of doubt in the minds of investors, especially those with exposure to government securities which were hitherto advertised as being risk-free. This has seen the securities industry come under strain, despite efforts at expansion under the Securities and Exchange Commission’s (SEC) 10-year Capital Market Master Plan.
Over the last decade, the industry has undergone significant growth as Assets Under Management (AUM) have increased from GH¢2.17billion in 2017 to GH¢7.78billion as of June 2022. The number of Collective Investment Schemes (CISs) – including Mutual Funds and Unit Trusts – has also grown from 53 to 80 as at the end of June 2022.
The low investment threshold required for these schemes is enabling retail clients to participate in investment instruments, including long-term investments that were previously inaccessible to them.
The value of collective investment schemes has risen from about GH¢0.7billion in 2015 to GH¢3.8billion in 2019, representing a Compound Annual Growth Rate (CAGR) of 51 percent. As of August 2022, the market value stood at approximately GH¢7.07billion.
The downsides last year have been offset by positive developments; including the introduction of rules for issuing green and sustainability-linked bonds (SBLs) by the Ghana Stock Exchange (GSE).
The GSE was also admitted to full membership of the World Federation of Exchanges (WFE). It is also a member of the African Securities Exchanges Association (ASEA) which recently signed a Memorandum of Understanding (MoU) with the Pan-African Payments and Settlement System (PAPSS) to collaborate on ways to enhance the payments process for cross-border securities transactions in Africa.
The Group CEO-Glico Group, Edward Forkuo Kyei; Managing Director-Stanbic Investment Management Systems (SIMS), Kwabena Boamah; Managing Director-Tesah Capital, Eugenia Basheer; Head, Group Business-Star Life Assurance, Dzifa Fiati; and Chief Investment Officer-Axis Pensions Trust, Nana Wiafe Boamah, will bring their vast experience to bear on the subject.