{"id":15295,"date":"2026-03-05T14:12:20","date_gmt":"2026-03-05T14:12:20","guid":{"rendered":"https:\/\/gnbcc.net\/?p=15295"},"modified":"2026-03-05T14:14:00","modified_gmt":"2026-03-05T14:14:00","slug":"secs-new-foreign-investment-rules-could-fuel-speculation-experts-warn","status":"publish","type":"post","link":"https:\/\/gnbcc.net\/secs-new-foreign-investment-rules-could-fuel-speculation-experts-warn\/","title":{"rendered":"SEC\u2019s new foreign investment rules could fuel speculation \u2013\u00a0 experts warn\u00a0\u00a0\u00a0"},"content":{"rendered":"\n

Industry experts have criticised the Securities and Exchange Commission\u2019s (SEC) new regulation which caps foreign investments for fund managers, warning that while the move could offer short-term relief for the cedi, it will be counterproductive for long-term economic health and risks eroding pension funds.<\/p>\n\n\n\n

The analysts stressed that inability to invest in global asset classes leaves fund managers\u2019 portfolios undiversified and overly-exposed to domestic macroeconomic risks, including currency depreciation which has historically eroded real returns when measured in dollar terms.<\/p>\n\n\n\n

SEC new regulation<\/strong><\/p>\n\n\n\n

Effective February 4, 2026, fund managers licenced to invest locally are now restricted from investing more than 20 percent of their funds under management in foreign assets. Those that were previously authorised to invest 100 percent in foreign securities must now cap their foreign investments at 70 percent, requiring at least 30 percent of assets be retained and invested in country.<\/p>\n\n\n\n

The new guidelines, which tighten the limits on how much fund managers can allocate to foreign assets, according to SEC are designed to stem capital outflow and support the local currency. However, investment professionals argue that the policy restricts portfolio diversification and could fuel speculative behaviour in the long run.<\/p>\n\n\n\n

Speaking to Business and Financial Times (B&FT) on condition of anonymity, a senior asset manager with extensive experience in foreign investments \u2013 especially in the U.S. market \u2013 described the policy intervention as a short-sighted solution to a structural problem.<\/p>\n\n\n\n

\u201cI don\u2019t think that is the most effective way to stabilise our currency. It may work short-term, but long-term it does not. The most effective way to actually stabilise our currency is by industrialising our economy long-term and reducing our dependence on importation,\u201d the asset manager stated.<\/p>\n\n\n\n

Temporary currency stability<\/strong><\/p>\n\n\n\n

The fund manager argued that while the restriction might prop up the cedi temporarily by reducing demand for foreign currency, the unresolved structural economic issues \u2013 including heavy reliance on imports \u2013 will continue to exert pressure on the exchange rate regardless of investment restrictions.<\/p>\n\n\n\n

\u201cI think that short-term it may seem to be working, propping up the cedi, but I don\u2019t think long-term it is going to be very effective,\u201d he added, suggesting the policy could backfire and fuel speculation. The source argued that allowing capital to flow out also facilitates creation of wealth which will eventually return to the local economy, citing Ghana\u2019s peers with more liberal foreign investments regulations.<\/p>\n\n\n\n

\u201cI know South Africa has a higher allocation for foreign investments. Their pension industry can actually invest up to 45 or 50 percent abroad. I think Kenya is also the same and Nigeria as of now,\u201d the source noted. \u201cThe companies that are doing those services (like Google or Apple), we should be allowed to invest in them. The only way we can benefit fully is to invest in the companies as well.\u201d<\/p>\n\n\n\n

\u2018Disservice\u2019 to young investors<\/strong><\/p>\n\n\n\n

The source further noted that due to the domestic capital market\u2019s shallow nature, forcing institutional investors to concentrate pension funds in government securities won\u2019t yield any benefit.<\/p>\n\n\n\n

\u201cMy financial responsibility is to members of the pension or investors on whose behalf I\u2019m investing. That\u2019s my primary responsibility. If the funds are not invested in the right asset classes for the assets to grow, for the person to achieve their investment goals, then I\u2019m not doing my job well,\u201d the fund manager noted.<\/p>\n\n\n\n

The source argued that this policy fails to account for the age and risk of individual  investors classes. Therefore, the he suggested a significant portion of pension funds \u2013 especially that of young investors \u2013 could be put in foreign assets with great long-term yield, while older investors\u2019 funds are put in government securities, since they are in a \u201cspending mode\u201d.<\/p>\n\n\n\n

\u201cFor young people that have another 30 to 40 years before retirement, there\u2019s no reason why they should be allocated to government securities. They don\u2019t need the income right now. Restricting investing for especially the younger generation to invest only 20 percent outside, I think it\u2019s going to be a disservice to that class of investors when they are actually  ready to retire,\u201d the industry expert explained.<\/p>\n\n\n\n

Risk of speculation<\/strong><\/p>\n\n\n\n

The industry insider further cautioned that stringent capital controls often create  incentives for nefarious activities in the market by fuelling black market activity which could potentially undermine the very stability SEC seeks to achieve.<\/p>\n\n\n\n

\u201cIf the right channels have a lot of restrictions, it will disincentivise people from using the banking system. If there\u2019s no restrictions and you know that you can always get access to foreign currency, there\u2019s no incentive to hoard. But if you\u2019re not sure when you\u2019re going to get some next, that\u2019s when people actually feel like the little you have, you try to hide it or hoard it,\u201d the source explained.<\/p>\n\n\n\n

Click here<\/strong><\/a> for source.<\/p>\n","protected":false},"excerpt":{"rendered":"

Industry experts have criticised the Securities and Exchange Commission\u2019s (SEC) new regulation which caps foreign investments for fund managers, warning that while the move could offer short-term relief for the cedi, it will be counterproductive for long-term economic health and risks eroding pension funds.<\/p>\n","protected":false},"author":10,"featured_media":15293,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"yes","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[153],"tags":[],"class_list":["post-15295","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-articles"],"jetpack-related-posts":[{"id":13261,"url":"https:\/\/gnbcc.net\/outstanding-corporate-debt-falls-95-year-to-july\/","url_meta":{"origin":15295,"position":0},"title":"Outstanding corporate debt falls 95% year-to-July","author":"Tracy Mensah","date":"August 29, 2025","format":false,"excerpt":"The volume of outstanding corporate debt securities on the Ghana Fixed Income Market (GFIM) fell by 95 percent between January and July 2025 \u2013 from 919.89 million a year earlier to 44.2 million \u2013 due to reduced issuance and retirement of existing instruments, according to the Ghana Stock Exchange (GSE)\u2026","rel":"","context":"In "News Articles"","block_context":{"text":"News Articles","link":"https:\/\/gnbcc.net\/category\/news-articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/10\/2025-08-29_0_222.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/10\/2025-08-29_0_222.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/10\/2025-08-29_0_222.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/10\/2025-08-29_0_222.png?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":14921,"url":"https:\/\/gnbcc.net\/banks-to-fund-60-of-govt-capex-in-2026-gab\/","url_meta":{"origin":15295,"position":1},"title":"Banks to fund 60% of gov\u2019t CAPEX in 2026 \u2013 GAB","author":"Michael Teye","date":"February 6, 2026","format":false,"excerpt":"Commercial banks are expected to finance about 60 percent of government capital expenditure (CAPEX) from 2026, placing them at the centre of the development agenda with what the Ghana Association of Banks (GAB) describes as a \u201cdouble-edged sword\u201d for the economy, according to its 2026 Industry Outlook.","rel":"","context":"In "News Articles"","block_context":{"text":"News Articles","link":"https:\/\/gnbcc.net\/category\/news-articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/02\/Bcapex.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/02\/Bcapex.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/02\/Bcapex.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/02\/Bcapex.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/02\/Bcapex.jpg?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/02\/Bcapex.jpg?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":13262,"url":"https:\/\/gnbcc.net\/carrying-over-10000-heres-what-bank-of-ghanas-new-currency-rules-mean-for-you\/","url_meta":{"origin":15295,"position":2},"title":"Carrying over $10,000? 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