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.
He, therefore, suggested that efforts to develop the financial sector should focus on enhancing depth, access, efficiency and stability, which were factors that had underscored efforts in most countries in the African sub-region to build sound, safe and stable financial sectors.
Dr Wampah was addressing participants at a public panel debate, organised on Wednesday 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 such as the weak financial sector support for the real sector.
He said corporate lending was still in many cases focused on the short end of the market and few banks engaged in long-term lending, while bank balance sheets tend to be dominated by short-term deposits.
There was also lack of adequate competition, as the banking sector remains in many cases, oligopolistic, leading to inefficient pricing of financial assets, while the increasing regionalisation of banks have brought on cross-border challenges that required appropriate regulatory frameworks.
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.