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With effect from January 1, 2007, Ghana will adopt the The Foreign Exchange Bill replaces the Exchange Control
International Financial Reporting Standards (IFRS) to Act of 1961 (Act 71). The fundamental import of the Bill
replace the Ghana National Accounting Standards (GNAS). is to remove existing restrictions to Ghana’s capital
Work in this regard has been carried out by the Institute account and to liberalise the environment for:
of Chartered Accountants, Ghana, in collaboration with
regulatory bodies such as the Bank of Ghana, the National Non-residents investing in Ghana;
Insurance Commission, and the Securities and Exchange Residents investing offshore;
Commission. The new standards are applicable to Residents issuing or transferring securities registered
companies whose securities are held by the public, banks, in Ghana to non-residents.
and insurance companies. Private enterprises and State-
Owned Enterprises are also expected to apply IFRS to Under the old regime, Ghanaian companies had to
enhance public confidence in their financial reporting. obtain Bank of Ghana approval before procuring debt
Small and medium-sized enterprises as well as Ministries, and other forms of capital from non-residents. Non-
Departments and Agencies in the public sector are resident foreigners could invest in companies listed on
expected to continue to use the Ghana National the Ghana Stock Exchange without prior approval from
Accounting Standards until January 1, 2009 when the IFRS the Bank of Ghana, subject to restrictions such as a 10%
and the International Public Sector Accounting Standards limit for a non-resident foreigner in a single issuer’s
becomes mandatory. securities, and a 74% limit for total non-resident foreign
interest in a single issuer’s securities. All these
Adoption of the IFRS makes Ghana compliant with global restrictions are expected to be a thing of the past with
standards of financial reporting and promises to promote the coming into force of the Foreign Exchange Act.
investor confidence in Ghana.
Credit Reporting Bill
Legislative Developments
The Credit Reporting Bill provides, for the first time in
Parliament passed the following bills into law in the last Ghana, a legal and regulatory framework for the
quarter of the year 2006: formation, storage, and sharing of credit information.
The Bill mandates every financial institution to submit
Whistle Blowers Act 2006 (Act 720) credit data to credit bureaus licensed by the Bank of
Ghana under the Bill and to obtain credit information
The Whistle Blowers Act 2006 (Act 720) provides for the from such bureau on credit applicants as part of the
manner in which individuals may, in the public interest, credit evaluation process. The Bill contains detailed data
disclose information relating to illegal conduct or corrupt protection provisions to avoid undue interference with
practices, and provides for the protection and reward of the rights of information subjects. The implementation
such individuals against victimization. of the Act is expected to improve credit risk
management by credit providers, improve access to
The Act is expected to promote higher standards of credit, and help customers with good credit histories to
governance in public and private organizations. benefit from relatively lower interest rates.
The National Insurance Bill seeks among other things to Government’s 2007 Budget and Policy Statement was
replace the current Insurance Law of 1989 (PNDCL 227) in read in Parliament on 17th November 2006. The theme
order to provide for more effective supervision of the for the Budget was “Growth with Stability”. It made
industry. Key changes introduced include: proposals for improving the business environment for
private sector-led growth through tax incentives, a more
higher minimum capital requirements; effective public sector, and improved access to finance,
the requirement for separation of life and non-life among other things. Highlights of proposed policy
insurance business; initiatives are attached to this Bulletin.
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Key Market Indicators
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