Foreign firms should list locally: Ghana bourse
Thu Apr 29, 2010 12:42pm GMT Print | Single Page [-] Text [+]
By Mark John and Kwasi Kpodo
ACCRA (Reuters) - Foreign players in Ghana's high-potential telecoms, energy and mines sectors should list shares locally to ensure Ghanaians reap some of the profits, the deputy chief of its stock exchange told Reuters.
In the latest push by Ghanaian authorities to ensure the West African nation enjoys the fruits of an oil-fuelled leap in economic growth, Ekow Afedzie suggested Ghana should follow a controversial move by Tanzania in February to make such listings obligatory.
"Why can't we link it to licences? Why can't we say that any time a company gets a licence it should float about 10 percent to the general public?" Afedzie said in an interview at the Accra stock exchange late on Wednesday.
"I know there will be a lot of resistance from all these companies. But Tanzania just did it. It just passed a law in parliament pushing all the telcos to give power to their locals," he said of a requirement for telecoms firms in the east African country to offer shares to the public starting in 2013.
A similar drive by Ghanaian authorities in the 1970s led to foreign firms such as Standard Chartered and Guinness now having local listings. But Afedzie said they had since become a rarity on the Ghanaian index of 35 companies.
He praised UK-listed Tullow Group Plc, operator of Ghana's giant Jubilee oilfield, which is due to start production later this year, for its plan for a local listing, and said others should follow suit to show their commitment to Ghana.
"That would drive the economy ... Some of the wealth being generated by these companies would stay in Ghana," he added, noting the step would also bring much-needed liquidity to the stock exchange, where trades rarely total $1 million a day.
However analysts have raised concerns that the Tanzanian law could dissuade some potential investors.
Yet in a sign that Afedzie's call could gain traction with Ghana's centre-left government, Vice-President John Dramani Mahama told Reuters in a separate interview earlier this week that he also backed more local listings.
"I think it is time for some of the big players to come on to the stock exchange," said Mahama.
"The telecoms industry is one humungous industry making a lot of revenues; if they listed on the stock exchange that should lift that stock exchange phenomenally," said Mahama, urging other Jubilee stakeholders aside from Tullow to list locally.
Major telecom players in Ghana include Britain's Vodafone Group Plc, a Zain unit soon to be acquired by India's Bharti Airtel, South Africa's MTN Group Ltd and U.S-listed Millicom's Tigo unit.
A spokesman for MTN in Johannesburg declined to comment.
Ghana is due to produce oil from its Jubilee oilfield from December this year, an asset with up to 1.8 billion barrels of reserves that some, including the IMF, see as possibly turning aid-reliant Ghana into a middle-income nation within a decade.
Growth next year is forecast to hit 20 percent, up from around six percent this year and is likely to be one of the highest rates in the world, as the first oil revenues and scheduled spending on infrastructure take effect.
Yet among moves that have raised questions over Ghana's broadly pro-investor image, the 16-month-old government has queried Vodafone's 2008 purchase of a 70 percent stake in Ghana Telecommunications (GT), the local operator.
Accra has also failed to endorse what sources close to the deal say is a $4 billion accord for private U.S. company Kosmos to sell its Jubilee stake to U.S. major Exxon Mobil, insisting Ghana itself was interested in the stake.
Mahama this week rejected accusations that Ghana was turning against investors, saying the country had a sovereign right to manage its assets to secure the best returns for Ghanaians.
