Dr. Henry Kofi Wampah, Governor of the Central Bank of Ghana on Wednesday called for the formulation of robust financial policies and regulatory frameworks as a practical step towards a stable and efficient financial sector for sustained growth and structural transformation in Africa.
According to him, the absence of these policies could have disastrous outcomes, as seen during the recent global financial and economic crisis, saying, a well-functioning financial sector would significantly impact positively on economic development.
Dr Wampah was addressing participants at a public panel debate, organised by the University of Ghana's Institute of Statistical, Social and Economic Research (ISSER), on how to build a stable and efficient financial sector for sustained growth and structural transformation in Ghana and Africa in general.
He underscored the fact that an efficient financial sector provided the rudiments for income-growth and job creation, and therefore plays a significant role in economic development.
He said the numerous policy reforms and transformations within the financial sector have yielded positive results with improved banking systems and stronger balance sheets and capital base, while risk management have been enhanced with some relative growth in capital markets across the continent.
According to him, recent reforms had laid emphasis on corporate governance issues, including enhancing transparency and accountability, improved information and disclosure requirements, investor education and promotion of better accounting and auditing standards in line with International practices.
Dr Wampah, however, indicated that notwithstanding the gains so far made, there were still some challenges.
He stated that Ghana's financial sector has also undergone various restructuring and transformation since the implementation of the Financial Sector Adjustment Programmes from the 1980's through to the late 1990's, an era that witnessed the promotion of non-bank financial institutions and the liberalisation of the foreign exchange market and the establishment of the Ghana Stock Exchange among others.
He said the Bank of Ghana recently implemented a new base rate model that sought to ensure transparency and uniformity within the banking industry, which was part of efforts to enhance transparency in pricing of loans in the industry.
Mr. Wampah said the BoG was also taking steps to further strengthen the regulatory and supervisory regime, by revising and consolidating existing industry laws and introducing other guidelines, such as Corporate Governance Regulations, Licensing Regulations, Outsources Guidelines, Risk Management Guidelines, External Auditors Regulations and Merger and Acquisition Guidelines.
He said it was expected that these initiatives would address potential vulnerabilities and ensure a safe and sound banking industry in Ghana.
The other panel members also cited issues such as the low level of financial sector credit to SMEs for their expansion and growth, cost of financing and efficiency of the financial markets, as key concerns and setbacks towards sustained growth in Africa.
They advised that African countries learned from the experiences of other successful countries and desist from being complacent with their own situations.