FUNCTIONS
- Formulate policy and guidelines, and advise the Minister of Finance on issues relevant to Financial stability, transparency and integrity, financial structure, development and soundness.
- Coordinate and enforce financial sector policies and activities of regulators and other national stakeholders to facilitate the attainment of objectives of financial sector initiatives in line with government policies and social contract across industry.
- Monitor and evaluate to ensure that government economic policy is supported by a smooth and well-functioning financial system.
- Examine vulnerabilities affecting the financial system and determine actions required to address them to effectively to promote confidence and maintain credibility in the financial sector.
- Promote and facilitate the education, public awareness and financial inclusion and literacy of the public and capacity building of regulatory bodies in the financial sector.
Units under Financial Sector Division:
- Development Finance Unit,
- Banking and Non-Banking Unit,
- Capital Market Unit
- Pensions and Insurance Unit.
DEVELOPMENT FINANCE UNIT
Development finance encompasses alternative financial initiatives involving microfinance, community development and revolving loan funds. Our role involves:
- The crucial role of providing credit in the form of higher risk loans, equity positions and risk guarantee instruments as a complement to private sector investments in developing countries.
- The Unit maintains oversight responsibility and policy development functions on all microfinance institutions, MASLOC, and Venture Capital Funds. In view of its development focus, it works with National Investment Bank (NIB), Exim bank, and Agricultural Development Bank (ADB) for aspects of their activities directed relating to development and poverty reduction.
- The unit is also in the forefront of policy initiation for micro insurance, informal pensions and other such initiatives undertaken between financial service providers and low income earners and/or the financially excluded.
- consumer issues such as policies and legislation regarding access to finance, disclosure and recourse mechanism and initiatives to promote financial capability
Financial markets are analytical viewed across a maturity spectrum.
- Money market: short-end of the market for instruments with maturities of one year or less.
- Capital Markets (Equity and Debt): market for instruments with maturities of one year or more-medium-term and long-term maturities.
- Capital Markets are also defined to include derivative market; Options, Swaps written on standard capital market instruments.
UNIT MANDATE
- The Capital market Unit is responsible for providing policy-based and strategic analysis on Ghana’s financial sector (capital market and related segment of the market) and oversee the implementation of strategies to strengthen, broaden and deepen capital markets.
- We play an oversight role through policy advise, formulation, sector policy analysis, monitoring and coordinating with stakeholders towards the implementation of policy initiatives in the sector.
FUNCTIONS
- Collect and analyze capital market data i.e. market reports, financial statements to inform policy decision
- Review policy documents and reports, capital market legislation to inform policy recommendations
- Conduct research into both domestic and international markets to inform policy proposals
- Liaise and coordinate with industry stakeholders towards ensuring policy harmonization
- Monitor developments and report on capital market activities
- Field visit to the SEC, the GSE and the Industry Association for market updates
- Provide Input for the Division’s quarterly and annual reports
- Provide input for the Division’s annual budget that feeds into the National Budget Statement and Economic policy of Government
- Implement financial sector strategies towards the development of the capital market
MAJOR STRATEGIC INITIATIVES
The Unit is currently spearheading and facilitating the following policy initiatives;
- Guidelines on Real Estate Investment Trust (REIT) and Mortgage Backed Securities to promote real-estate investment to help solve the housing deficit in the Country.
- The capital market local content policy that enjoins companies in the energy, oil and gas, financial services, telecommunications, and mining sectors to list a pre-determined percentage of their shares on the GSE
- Exempt financial services industry from stamp duty for 2 years to enable the re-capitalization of the industry;
- Revision of the minimum capital requirement and licensing regime for the capital market industry
- Strengthening the regulatory capacity of the Securities and Exchange Commission (SEC) and market operators –financial sustainability, market surveillance system and market portal for improved market oversight
- Facilitate the work of the Capital Market Working Group
- Identification and harmonization of capital market laws and guidelines to plug gaps and facilitate market operation – i.e. regulatory reforms in pension and insurance.
IMPLEMENTATION OF A FINANCIAL INCLUSION STRATEGY- For ensuring:
- financial stability and soundness
- orderly deployment of financial infrastructure
- Financial access to quality and trusted financial product and services.
- Financial literacy and capacity especially on the part of consumers of financial services and products.
- Financial consumer protection.
REMITTANCE PROJECT
- Executive the remittance grant project aimed at reducing the cost of remittances into Ghana and redirect financial consumer behavior from consumption into investment and pensions
- Conduct a study into the dynamics and market forces into the remittance market to aid policy decision making.
- Establish modalities leading to the issuance of Diaspora bonds.
E-SERVICES PORTAL: DIGITIZATION OF GOVERNMENT PAYMENTS TO IMPROVE EFFICIENCY OF GOV’T SERVICE DELIVERY
- Assist MDAs in the rollout a programme for the digitization of Persons to Government (P2G) Payments by making available a detailed research report to enable government prioritize and prescribes the models for digitizing payments to the MDAs.
PROJECT AND HOUSING FINANCE
- Investment in housing and the housing finance system to cater for the needs of the poor.
- Innovative housing and housing microfinance solutions
- Executing initiatives that will attract funding for projects under self-financing (cash flow generating) arrangements.
General responsibilities of Bank & NBFIs Unit include:
- Conducts analysis and provide advice on (i) structural issues relating to ownership, investment, foreign entrant and corporate governance; (ii) competition issues in Bank & NBFIs industry;
- Monitor and advice on major financial transactions including mergers and acquisitions in Bank & NBFIs industry;
- Conducts research and analyses performance of Bank & NBFIs subsector;
- Regularly updating legislation and regulation and provide advice on legislative and regulatory reforms for policy development of Bank & NBFIs subsector.
FUNCTIONAL RELATIONS
The Unit collaborates with other units in FSD regarding information sharing and implementation of Division’s programmes including organization of National Financial Literacy Week. In providing policy advice and analysis on regulatory and stability issues, the Unit works closely with Bank of Ghana (Banking Supervision Department, Other Financial Institutions Supervision Department, Legal Department, Banking Department, Financial Stability Department) on efficient functioning of the subsector; the Financial Intelligence Center of Ghana on policies relating to combating money-laundering and the financing of terrorism; the Ghana Inter-bank Payment Settlement System on matters relating to payment system clearing and settlement; the Debt Management Division on information on government borrowing. Other stakeholders are the Ghana Association of Bankers, the ARB Apex Bank, and the Ghana Microfinance Institutions Network.
The Pensions and Insurance Unit is one of the four units of the FSD. It’s made up of Pensions and Insurance Desks and its primary object is to ensure deepening of the financial sector by providing effective policy direction to the Ministry on Pensions and Insurance and other related issues. This unit is also responsible for the monitoring of sector performance and plays a lead role in developing sector policy initiatives.
The operations of the insurance and pensions industry are guided by the Insurance Act, 2006 (Act 724) which replaced Insurance Law, 1989 (P.N.D.C.L. 227) and Pensions Act, 2008 (Act 766 respectively. The unit collaborates with the following institutions to perform its functions and to achieve its objective:
- National Insurance Commission
- Ghana Insurers Association
- Ghana Insurance Brokers Association
- National Pensions And Regulatory Authority
- Social Security And National Insurance Trust
- Pension Corporate Trustees
- Pension Fund Managers
- Pensions Fund Custodians
HIGHLIGHTS ON SOME ONGOING SECTOR ACTIVITIES
- Establishment of an informal pensions scheme to cater for the informal sector. This initiative came as a result of a research that indicated that more than 80% of adult Ghanaians retire from active labour force without pensions. This is envisaged to improve access to formal financial services which will deepen financial inclusion.
- Passage of a new Regulatory Framework (new insurance Act, Regulations and Codes) to replace the Insurance Act, 2006 (Act 724). The new regulatory Framework will ensure compliance to international standards, for example on Governance and internal control, risk-based supervision, group supervision, preventive and corrective measures.
- Development of the Insurance Brokers Market to facilitate insurance transactions and improve confidence in the sector.
- Reforms in the Pensions and Insurance Industry to boost capital market development.