• 2

Photo: Mr. David Tetteh, Consultant, GAX of the GSE

Raising financing for business is one of the major difficulties for businesses in the country. It comes as the most difficult aspect of their business in addition to taxation, policy and public administration. There are a number of options for businesses to raise financing. The traditional and informal means have always been with self-financing, family and friends.  The other financing sources have mainly been the more formal means with banks, venture capital or private equity firms and the stock exchange from where financing is raised from the public.

The Ghana Stock Exchange (GSE) performs that role of providing the platform for such activities.  However, the requirements could be so stringent that only the large corporates are able to raise capital from the GSE as well as other nation’s stock exchanges.  This eliminates the typical SMEs whose structure, size and capacity prevent them from qualifying to patronize the platform.  Therefore a lower and less stringent platform has been set up by the exchange to enable smaller companies to raise public financing.  The Ghana Alternative Exchange (GAX) was instituted some three years ago with the aim of helping SMEs raise financing. www.ghanatalksbusiness.com has been throwing light on raising financing for businesses.  In a recent event by the GAX the manager of GAX at GSE, Mr. David Tetteh laid the requirements for SMEs to be able to raise the needed financing for their business. Requirements are itemized below;

Related: Eight reasons why your company should consider listing on the Ghana Alternative Market (GAX)

 Applicants are expected to meet a couple of general conditions. The issuer (company interested in listing) must necessarily be a public limited liability company duly incorporated under the Companies Act, 1963 (Act 179). The issuer of securities shall accept the continuing listing obligations which apply the admission of its securities to the GAX.

Stated Capital requirement

A company applying to list on the GAX must have a minimum stated capital of GH250,000 at the time of listing. The stated capital of GH250,000 shall be the capital available prior to listing but after the company`s initial public offer (Please note: The initial public offer precedes listing on the GAX). Rural banks are however exempt from the above specified capital amount. The capital requirements for rural banks interested in listing on the GAX shall be as determined and required by the Bank of Ghana.

In a situation where the surplus of the potential issuer is negative, the shareholder`s funds of the company must be at least GH250,000.

Public Float

The capital float of the applicant must constitute a minimum of 25% of the total number of issued shares and the minimum number of public shareholders shall be 20.


At least 50% of the board shall be composed of non-executive directors and at least one or approximately 25% of the total shall be independent. All executive and none-executive directors shall attend a directors` induction program under the auspices of the GAX Governing Committee.

Management should have requisite expertise in the core business of the GAX company. The integrity and character of the management of such a company shall be taken into account by the committee in assessing the application for listing on the GAX.

Period of existence

For a business entity`s securities to be eligible for admission to the GAX, the company must have been in business for a minimum of one year and should have published or filed accounts in accordance with the Companies Act, 1963 (Act 179) for at least one financial year.

Business profitability

The company interested in listing to the GAX need not have recorded profits in the past but must have the capacity to make profit at least at the end of its third year of listing.

Transferability of shares

The securities for which listing is sought must be freely transferable, subject only to restrictions imposed by the laws of Ghana. A company intent on listing on GAX shall not issue paper certificates but shall have all its issued shares in electronic book entry form with the GSE Securities Depository. This is intended to facilitate trading in those shares.

Corporate Advisor

An applicant shall appoint a corporate advisor which may be an individual or a corporate entity. The corporate advisor is saddled with the following responsibilities:

  • Advise and guide the directors of the GAX Company about their continued listing obligations on an on-going basis;
  • Make available to the GAX any information, in such form and within such time limits as the GAX Committee may require; and liaise with the GAX on behalf of the company for which it acts where requested to do so.

Sponsorship of Applicant for listing

Licensed Dealing Members, Investment Advisors or Issuing Houses shall sponsor an application for listing on the GAX. The sponsor shall underwrite directly or indirectly the minimum offer to be raised by the issuer.

PS: Employees at the Ghana Stock Exchange and more specifically the GAX at Cedi House, Accra are more than willing to walk you through all the above stated requirements and answer all the questions you may be intent on asking (and of cause at NO cost to you).