Shareholders in other parts of the world are reaping the benefits of their investments but that cannot be said of those in Ghana.
Recently, some shareholders of one of the leading banks in Ghana have expressed their regrets after investing in the bank through share purchasing. These irate shareholders were livid to the extent that they couldn’t wait for the bank’s annual general meeting (AGM) to close before they left the venue of the event.
Although, other shareholders were quiet but the irate shareholders did not understand why the bank’s board could recommend the payment of a paltry dividend of about 82 pesewas per share.
“If I had invested my money on other businesses by now I would have been making more money than what the bank is giving to me”. This is just a rip off to the highest degree, they stated.
The above scenario is not new in Ghana. Shareholders of the various companies listed on the Ghana Stock Exchange (GSE) have been complaining about the dividends they receive annually.
As a result of the low dividends they receive, many shareholders in the West African second largest economy have become dormant. Simply put, they don’t care about what the companies used their investments for. Some even don’t attend the AGMs of their invested companies.
So, some companies use that as an advantage couple with economic factors to pay low dividends to shareholders.
In economics, a shareholder is any person, company or other institution that owns at least one share of a company’s stock. Because shareholders are a company’s owners, they reap the benefits of the company’s successes in the form of increased stock valuation. If the company does poorly, however, shareholders can lose money if the price of its stock declines.
Though they are not involved in most decisions, shareholders do have rights, which are defined in the corporation’s charter and bylaws. Shareholders have a right to inspect the company’s books and records or sue the corporation for misdeeds of the directors and officers, for example. Common shareholders are also entitled to vote on major corporate matters, such as who sits on the board of directors and whether a proposed merger should go through.
Most importantly, in the event that a company liquidates its assets as a result of bankruptcy or dissolution, its shareholders have a right to a proportionate allocation of the proceeds. However, creditors, bondholders and preferred stockholders have precedence over common stockholders in a liquidation. Shareholders also have a right to receive a portion of any dividends the company declares.
Shareholders also have the right to attend the corporation’s annual meeting to learn about the company’s performance, or listen to the meeting via conference call. Common shareholders who cannot or do not wish to attend a meeting to vote on a given matter have the right to vote by proxy through the mail or online. The specific rights allocated to both common and preferred shareholders are outlined in each company’s corporate governance policy.
Back home in Ghana, some companies do not send their financial statements to the shareholders on time because of this most of them attend the AGMs unprepared. So, they cannot ask questions relating to the expenditures.
From the above, one can conclude that Ghanaian shareholders are yet to benefit from their investments. This may partly due to the lack of interest in savings or investment among majority of the people in the country.
Some financial watchers have lamented about the low level of savings among Ghanaians, describing it as disincentive to channel funds for investment. They argued that high levels of savings provide liquidity for the private sector to access funds at a cheaper rate. But that is not happening in Ghana.
Currently, the country’s gross savings is said to be below 15 percent, a situation many have described as inadequate.
The Managing Director of Stanbic Bank, Alhassan Andani said:“If you take Ghana the average gross savings of our total national earnings is about 15 percent, compare that to Singapore, it is about 50 percent. So does this surprise you that Singapore which is making huge infrastructure with GDP almost four times Ghana’s GDP still hold on to the savings culture?,” he told CITI FM, an Accra-based radio station.
Mr. Andani was of the view that Ghana could learn from the Asian economies that have grown savings as a national culture. However, analysts said successive governments have attempted to improve savings culture in the country but failed.
“If you look at most of the Asian Tigers, immediately they came into economic growth they went into the habit of savings, that enabled them to be able to build personal wealth. When you build personnel wealth you are actually able to sponsor goods and services that are produced in the economy and therefore it gives impetus to companies to continue to produce,” he said.
Through savings, the country will have a pool of funds to channel to the real sectors of the economy. Because of the savings the country will also pool resources which individual companies and government can use the money to create jobs for the teeming unemployed youth in the country.
By Masahudu Ankiilu Kunateh, African Eye Report
