Ghana@60: The GSE in foreign hands: The utmost part of equity of GSE-listed companies is held by foreign institutional investors. If the Ghanaian economy is to strive and serve its people, this must change.

By Robin JASPERT

Stock-listed companies and equity markets are at the heart of our contemporary economic systems. Financial markets and motives have come to dominate the U.S. economy starting in the 1970s and have subsequently spread across the globe, drastically increasing the global relation of market capitalisation to Gross Domestic Product (GDP) from a mere 27 percent in 1975 up to 129 percent in 2024. Total assets of stock-listed companies now amount to a staggering total of US$101.52 trillion in market capitalization.

This spread of equity markets, which are now found in almost every country across the globe, arguably has increased the arsenal of financing sources for corporates. It has enabled a variety of companies – in Ghana, on the African continent, across the globe – to tap markets for necessary investments. At first sight, the thereby improved access to finance may seem to work to the benefit of economies on the African continent, such as Ghana’s. But in reality, the stock-listed corporate-governance model, in conjunction with liberalised capital flows and a highly unequal global distribution of financial capital, creates a massive outflow of capital from the Ghanaian economy each year.

Ownership

The global distribution of financial capital is highly unequal. End of year 2024 the United States alone was home to financial assets worth an estimated €130 trillion out of the estimated global total of 269 trillion. China comes second with about 39 trillion, followed by Japan, Germany and the United Kingdom. At the same point in time, Ghanaian financial assets totalled only about €34 billion.

Through the equity-financed corporate business model the unequal global distribution of financial assets is reproduced in the sphere of corporate ownership. Of course, in a global economy where capital controls have largely been dismantled – but for some economies with strong state involvement – the economies with the biggest financial sectors dominate equity investments and thus corporate ownership across the globe. This is true in Ghana as it is across Africa.

As an analysis of the eight biggest equity indices on the continent with solid data availability, based on Bloomberg terminal data, shows on average 54 percent of equity in stock-listed companies is held by foreign investors. Sit with this for a minute: more than half of the ownership of the continent’s stock-listed companies in these key economies is held by foreign investors. For Zambia this number reaches a staggering 87 percent. On a weighted average, 11 percent of the shares are held by financial actors in the former colonising power – which for most of the countries in this dataset is the United Kingdom. The United States are also big in the game; in South Africa they hold more than 30 percent of the equity.

And not to forget the tax havens. In Ghana Investcom Consortium Holdings, based in the British Virgin Islands, holds 77 percent of Scancom, better known as MTN Ghana. MTN Ghana is, by some distance, the heavyweight of the GSE. Forced by a due-diligence process, Investcom Consortium Holdings sold a small share of their holdings to the local directors of the company at the end of 2024. In Nigeria the single biggest investor of the NGX stock index is MTN International Mauritius. With about 74 percent they are the biggest shareholder of MTN Nigeria and channel their money into the tax haven Mauritius.

The geographical distribution of GSE ownership clearly shows that the owners of 30 of Ghana’s most important companies mostly are located abroad. By far the biggest share of the GSE is held on the British Virgin Islands, approximately 36 percent of stock-market capitalisation. It is followed by the United Kingdom with roughly 15 percent. Ghanaian owners rank only third with much less – about 6 percent.

But for some exceptions, the dominant players in the current constellation of global corporate ownership are institutional investors. This category includes asset managers, private-equity-firms, hedge funds, holding companies, investment advisors, and similar actors. These hold more than 60 percent of stock listed companies in the GSE.

The GSE

The consequences of this corporate governance regime are drastic and lead to a systematic and massive outflow of value from the country. GSE-listed stock companies paid a total of GH¢10.64 billion of dividends in 2024. Using the end-of-year exchange rate this amounts to roughly US$724.2 million. As 81 percent of shares are foreign-held, US$586.6 million go abroad. After deducting the final withholding tax rate of 8 percent US$539.6 million of net profit remain for foreign investors.

On top of that come the profits investors make through equity gains. To be fair, these still have to be realised, but a rise in their value still marks a significant increase on the asset side of the investment portfolio. The GSE climbed about 75 percent in 2025. The total foreign investment in the index stood at a minimum of US$93 billion. If we exclude exchange-rate and inflation developments for simplicity, this amounts to a rise in stock value of roughly US$40 billion in foreign investors’ portfolio. Deducting the 25 percent flat tax on realised equity gains still leaves a staggering US$30 billion of annual value outflow in just one year – based on the assumption that the shares are sold.

Neocolonialism and Development

Arguably the most prominent voice globally to warn for foreign control of the domestic economy is the founder of Ghana, Kwame Nkrumah. He warned of the detrimental effects of foreign investments, particularly if these are not aimed at local development. He argued in 1965 that “[Foreign] investment under neo-colonialism increases rather than decreases the gap between the rich and the poor countries of the world”. And indeed, if more than 30 billion USD flow out of Ghana in only one year, this value transfer to tax havens, Europe and North America, is sure to increase the gap between rich and poor countries instead of working to the benefit of the people and economy of Ghana.

Disclaimer: The empirical findings and parts of this article were originally published with the Review of African Political Economy Blog (www.roape.net).

Robin is a PhD candidate at the department for international relations and international political economy at Goethe University in Frankfurt, Germany. His work focusses on financial markets, fiscal and monetary policy, global power relations, and ‘sustainable’ finance.

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