…And chases out investors
…Stanlib chief, Alex Asiedu diagnoses
By Frederick ASIAMAH
If you were blessed with half-a-million dollars today, be very honest about it, where would you invest it?
That is a question from Emmanuel Alex Asiedu, Managing Director of Stanlib, an authorised financial services provider and a member of the Standard Bank Group.
While you are thinking of your answer, Alex Asiedu predicts the response of majority of Ghanaians will be: “they would find the way of packing it outside the shores of this country.”
He points out that there are people with money to invest but the investment climate in Ghana deters them.
Alex Asiedu fielded questions from Business Day at his comfortable office in the aesthetic Stanbic Heights situated in the plush Airport City, speaking on topics such as his personality, his career as investment practitioner and his passion as a life coach.
The interview also included questions relating to what he would be speaking about at the upcoming “SpiritPreneurship Summit 2017” slated for April 8-9 in Accra (more on this next week).
In this piece, we share excerpts of his thoughts on the investment climate in Ghana, his predictions for the wider Ghanaian economy vis-à-vis the Ghana government’s budget and monetary policy for 2017.
Excerpts:
Business Day (BD): Let’s talk about what you do here – investments.
Emmanuel Alex Asiedu (EAA) I have a feeling you are talking about our firm, right – Stanlib? Stanlib is not really a bank. It’s an investment firm. So, if we are talking about investment firms, there must be over 150 in the country. The total funds under management is probably upwards of GHC20 billion. It employs quiet a number of people. Of that, the pensions sector is the fastest growing part of it – pensions sector is probably around five to six billion cedis and there is a retail and individual stuff as there are corporate funds. So, that’s the kind of industry we work in. There tends to be a bit of blurred image when people talk about Stanlib and people talk about Stanbic but it’s all one family. We are all under the Standard Bank Group. So, Stanlib is the investment franchise for the standard bank and Stanbic family. That’s what we do.
BD: Well, I was having a conversation with somebody and the person said that as a country we are not tapping into the full potential of pension funds. What’s you view?
EAA: The person is more than correct. I mean, really, pension funds are cedis – cedi denominated. We need a lot of cedis to do a lot of work in the country; government and private sector. Let me give you a very typical example. Sometimes, during the week, we’re parked with cash – assets that we don’t really know how to use. And, that’s not to say we are bad fund managers. I mean, I would stick out my chest and say we are probably the best in the country; I don’t want to sound immodest but I think we are. But the way the entire system is set up, sometimes we don’t have the space to do stuff that would really, really impact the economy the way it should. And so, when government gets up and say it’s issuing sovereign bonds, etcetera, you want to wonder whether it really knows that there are resources available; and if those resources are properly monitored and the right sort of incentives are dangled in front of those resources, there is a lot that we can do internally. So, the person is right.
BD: What kind of resources are you talking about?
EAA: Pension funds – I mean investment funds. I mean there are people in Ghana, who actually have money. But let me ask you this. If you were blessed with half-a-million dollars today, where would you invest it? But if you ask most people the question, they would find the way of packing it outside the shores of this country. Why?
BD: I should be asking that question. Actually, coming here this morning, I was reading a report on capital flight, tax avoidance and the like. I was reading the figures and they were quite scary. I want to find out why people would prefer to take the money outside?
EAA: I think it’s simple.
BD: How?
EAA: Because they don’t have enough belief in the system here.
BD: What would make them have belief here?
EAA: Governance! Within it, corruption! Lack of opportunities! I mean, look at our hospitals; look at our schools; look at the roads; look at the many, many, many four-wheel drives honking arrogantly on our roads when the rest of us are stuck in traffic. The big men, do they care about us? So, when people see these things, they do not have confidence in the system.
BD: That notwithstanding, what’s the best place for anyone to put their money now?
EAA: In Ghana?
BD: Yes. I see a lot of people putting up high rise buildings, schools.
EAA: That’s like asking me: what’s the best pill to take this morning? I don’t know whether you have malaria, whether you have flu. So, I need to know what your needs are, what you wants are. I would probably put money in real estate.
BD: Real estate?
EAA: It’s good. Real estate does well. That’s why it is called real.
BD: But we’ve heard stories about real estate market crashing.
EAA: But you see the point I’m raising? For everything, there’s the good and the bad. It is our job, before getting into anything, to try and find out what the risks and returns are. Weigh the options and then, make informed choices about that. Period! So, for me, people would fail in real estate, just like people would fail in marriages, just like people would fail in any other part of life. It doesn’t mean that real estate is bad. In fact, real estate in this country, still carries more rewards than risks. That’s my take.
BD: Now, let’s look at the bigger economy. I’m sure you’ve read the budget.
EAA: A bit of it – as best as I can.
BD: Relating it to investments and the opportunities it would create, what do you think the future would hold for especially the people who haven’t had enough confidence to put their money here?
EAA: Well, I’m trying to be objective. So, read no political meaning into what I will say. But, I think, to a large extent where business growth is concerned, the budget was positive. There was talk about nuisance taxes, etcetera.
The absolute sums are not game-changing but the signals they send – I mean, I would not have gone borrowing on the international market like we were doing previously; we were actually borrowing to shore up our currency; literally, in effect. That’s what we were doing. Now, what government is doing is to make the right noises; borrowing would be domestic and trying to remove obstacles to business, etcetera.
Those are things that we need to do. Try to create what we call fiscal space, reduce your fiscal deficit, etcetera. If you do that then there’s space so you are not spending on your interest payments and you crowd in the private sector.
People can borrow instead of the government borrowing. So, the right noises are being made. So, I actually, have hope. My only questions are how we can juxtapose the one-district-one-factory with fiscal consolidation because that will need a bit of spending. And also the free SHS thing. If they can work those things out, I think there is more hope than despair in the months ahead.
