This is the indication from President Nana Akufo-Addo. According to him, his administration is considering the decision to list the two institutions to make the country’s power sector more effective.

He added that this will also form part of government’s plan to develop an electricity master plan.

“…Overall, we have begun to develop a national electricity master plan which will also explore the benefits of listing VRA and GRIDCO on the stock exchange,” the President stated when he addressed Parliament in his first State of the Nation on Tuesday.

The move, if successful, will be a fulfillment of what some analysts have suggested as the best alternative to solve the country’s recurrent challenges in the power sector.

Currently, the debt owed institutions in the energy sector is estimated at 4.4 billion cedis. The development has also had a toll on the performance of the financial sector as most banks have lent huge sums to VRA.

The continuous delay in the payment of the debt, has also compounded the debt portfolio of the banks.

“We have inherited a heavily indebted energy sector with a net debt reaching 2.4 billion Unites States Dollars as at December 2016. I have to point out the alarming fact that eight hundred million of this debt is owed to local banks which threaten their stability and that of the whole financial sector. Indeed, the huge indebtedness of the energy sector constitutes the single major hurdle to Ghanaians to enjoy reliable and affordable electricity supply.”

High tariffs

The President also bemoaned the high tariff regime in Ghana which in his view, made local businesses not competitive  enough even within the sub-region.

As an alternative, the NPP government is set to review the current tariff policy to relieve the plight of lifeline consumers.

“We produce power from Akosombo at 3 cents per kilowatts hour, the marginal price for businesses is an effective 42 cents; more than ten times the average tariff in West Africa. This makes it difficult to start a business here and be more competitive.”

Meanwhile, Nana Addo says his government will review power agreements signed under the NDC administration.

To this end, the government says it will ensure transparency in deals and provide value for money.

“As at the end of 2016, the Electricity Company of Ghana, had signed 43 power purchase agreements, whiles a further 23 were under discussion. Government is conducting a review of all the power agreements entered into by the previous government in order to prioritize,  renegotiate, defer or cancel outright if necessary in the national interest.”

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post VRA, GRIDCo to be listed on the GSE – Nana Addo appeared first on Citi 97.3 FM - Relevant Radio. Always.

[contextly_sidebar id=”AfCXMGqGBthyvk33XCSo7tk2iCB2AsCs”]According to managers of the market, the continuous imposition of the tax is a disincentive for investors and has also adversely affected the market.

“Our particular worry is that even within West Africa, Nigeria has capital gains at zero likewise does Cote d’Ivoire which is the market for the eight Francophone West African countries and there are many African states which also have the same zero capital gains tax,” Managing Director of the Ghana Stock Exchange Kofi Yamoah told Citi Business News.

Gains on investments from the capital market were tax free with the establishment of the Ghana Stock Exchange.

However the new 2015 Income Tax Act by the Ghana Revenue Authority (GRA) which took effect in January 2016 introduced a 15 percent tax on gains made from the capital market.

There have been several agitations to get the tax scrapped.

Industry players have argued that the development has made it unattractive for new investors to come onboard to increase the activities on the local bourse.

Already, the NPP administration is expected to completely abolish five taxes and review downwards, five others upon assuming governance.

The party argues that the imposition of taxes have rendered businesses uncompetitive and equally affected their contribution to GDP.

But the Managing Director of the Ghana Stock Exchange, Kofi Yamoah tells Citi Business News Ghana’s stock market could be more competitive if the 15 percent capital gains tax is abolished.

“If you go back to that scenario where our neighbouring countries are charging no taxes on their capital gains, then we are becoming uncompetitive even in West Africa and that is the worry for us in addition to the fact that we want the retailers to patronize this market and one way that we can achieve is to return to the status quo where capital gains were not taxed.”

The GSE is however projected to end the year in a negative growth due to the impact of the macro-economic conditions on the performance of companies on the stock exchange.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Abolish 15 percent capital gains tax – GSE to NPP appeared first on Citi 97.3 FM - Relevant Radio. Always.

Information available to Citi Business News indicates that the bank is likely to complete its process by the end of this year after revising its issuing calendar with the industry regulator.

The Securities and Exchange Commission (SEC), intensified its appeal for multinationals to list on the local bourse after Nigeria’s Legislature passed a law to make it compulsory for multinationals to list on the country’s stock market.

According to the Director General of SEC, Dr. Adu Anane Antwi, the coming onboard of multinationals like Access Bank will promote local participation and stabilize the country’s currency.

“The advocacy continues and we believe that we will get some of the companies responding positively. For example Access bank which is a Nigerian owned bank is preparing to float parts of its shares and list on the Ghana Stock Exchange…We are hoping that other companies will heed to the appeal and do same,” Dr. Anane Antwi opined.

Currently, the stock market comprises 42 companies including multinationals like Tullow Oil Plc and Standard Chartered Bank.

Access bank’s moves when successful will make it the first Nigerian based bank to list on Ghana’s stock exchange and the tenth bank to list on the bourse.

The bank in December 2015, was the 6^th most profitable bank in the country improving a step up from the previous year.

In the same year, it also increased its share of industry deposits from 3.5% to 4.5% placing it at number ten in deposit share ranking.

Citi Business News understands Access bank will cede up to 32 percent of its stake to locals.

Some customers of Access Bank who have been speaking to Citi Business News expressed mixed reactions on purchasing shares in the bank.

Meanwhile Dr. Adu Anane Antwi believes making it compulsory for multinationals like Access Bank to cede parts of ownership to locals will be beneficial.

“When it is also listed on the GSE, it will deepen the exchange, increase the size and make it competitive to other bigger exchanges even in Africa,” he stated.

Access bank commenced operations in Ghana in May 2009 as a full service commercial bank after acquiring Intercontinental Bank in 2012, making it one of the largest retail banks in Ghana.

Access bank’s stated capital is 118 million cedis.

More multinationals to list?

It is however worth to note that none of the five telecommunication companies are listed on the stock market.

However, MTN recently announced a decision to cede 35 percent of its stake in Ghana to raise capital and secure its 4G spectrum license.

But Citi Business News understands that MTN is yet to conclude processes to allow it sell thirty-five percent of its stake in Ghana.

It is not certain how much MTN may float to the public but the Director General of SEC, Dr. Adu Anane Antwi explains, his outfit would have preferred a complete listing by MTN on the domestic bourse.

“It is welcoming news as Ghanaians will own the shares but it is more beneficial to the entire market when it is listed on the Ghana Stock Exchange,” he said.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Access Bank to list on the Ghana Stock Exchange appeared first on Citi 97.3 FM - Relevant Radio. Always.