Geert Bekaert and Campbell R. Harvey's


Chronology of Economic, Political and Financial Events in Emerging Markets




Major Political and Economic Events


Banking crises (1982-1989): 7 audited banks (out of 11) insolvent; rural banking sector affected. Causes: inadequate banking supervision, deficient bank management, massive devaluation and dismantling of protectionist barriers reduced corporate sector's ability to repay its debt.a2


A new Investment Code, aimed at promoting foreign investments, was promulgated.a3(first entry)


The introduction of the Insider Trading Laws.a4


Nonresidents were allowed to deal in securities listed on the Ghana Stock Exchange, subject to a 10% limit for an individual and 14% limit for total holdings by nonresidents in any one listed securities. a3


ADR effective date. (Company=ASHANTI GOLDFIELDS COMPANY LIMITED, Exchange=NYSE)a11


The prior approval of an Implementing Committee through the Minister of Foreign Affairs is no longer required for the purchase of local real estate by nonresidents.a3


The IMF approved $110 million loan for Ghana.


The World Bank approved a $50 million interest-free loan, helping to develop free trading zones within Ghana.


U.S. President Bill Clinton and President Jerry Rawlings of Ghana met to sign a new trade and investment agreement. U.S pledged monetary aid to Ghana.


Social Security Bank announced that an equity re-purchase plan had been approved by its company board.


Lonmin Plc's conditional offer for Ashanti Goldfields would lead to one of the world's top five precious metal producers.


The New Patriotic Party beat the incumbent National Democratic Congress, and J.A. Kufuor was elected as the new president. The presidential and parliament transitions were completed peacefully, the first time in the history of Ghana.


Ashanti Goldmines, Ghana's largest gold producer and the largest stock accounting for most of the market capitalization, reported a US$810 million loss for fiscal year 1999.


The U.S. and Ghana signed an "open skies" agreement, lifting restrictions on commercial air traffic.


Cedi depreciated by 29% for the first four months. AngloGold of South Africa agreed to buy 50% of Ashanti.


The government announced that Produce Buying Corporation, the country's largest cocoa-buying firm, would be listed on the GSE after early privatization. To calm down the labor strikes, the government increased wages by 20%, criticized by the IMF because of the possible increase in budget deficits.


The government tightened rules on foreign-currency transactions and pledged to join a currency union by 2003 with five other West African nations.


The Bank of Ghana raised the three-month deposit rate to 33.5% from 20.5% at the beginning of the year. The Association of Ghana Industries (AGI) publicly criticized monetary tightening.


Telecom Malaysia announced it would buy 15% more of Ghana Telecom for US$110 million. The government invited offers from strategic investors for a stake in GIHOC, the largest distillery.


National Petroleum re-opened an oil field, and a South Korean firm, SK Engineering & Construction, won a contract to build a US$40 million oil pipeline in the country.


Inflation for the year was at around 40%, and high oil prices helped push up imports, exacerbating the budgetary crisis.


The bourse changed its trading method and now has all listed securities trading on the continuous auction trading (CAT) boards on the exchange floor.


Healthy profits and progress in corporate restructuring buoyed the market, and the GSE hit a year high.


The government listed 15 new companies to be divested.


President Kufuor shuffled his cabinet and created new ministerial posts. The government sanctioned eight banks and instructed them to disburse US$36.1 billion worth of cedis in liabilities.


The government had made plans to set an investment fund that would provide financial assistance to accredited investors.


GSE reforms in 2001 included income tax concessions, reduction of income tax payable by listed companies, and the extension of the period of exemption from corporate tax extended for another five years. The exemption period from capital gains tax for investors in listed companies was extended by five years. Income tax payable by listed companies was lowed to 30%.


New investment promotion centre opened. b1


State of emergency is declared in the north after a tribal chief and more than 30 others are killed in clan violence.


Minimum wage rises 30% to C7,150 (US$0.90).


President Kufuor inaugurates a reconciliation commission to look into human rights violations during military rule. The commission begins hearing testimonies in January 2003.


Trust Bank, the second biggest bank in Gambia, has become the first foreign company to register on Ghanaian Stock Exchange.


Ghana gives up on controversial US$1bn loan from a private company, the International Financial Consortium.


The IMF has approved a three-year Poverty Reduction and Growth Facility (PRGF) for Ghana worth US$258m.


Government approves merger of two gold-mining firms, ending bidding war and creating new gold-mining giant.


Bank of Ghana reduces prime rate by 250 basis points to 21.5%


The Ghanaian parliament passed a new banking law, which revises the Banking Law of 1989 - is designed to strengthen the operational independence of the Bank of Ghana (BoG), to reduce political interference and involvement in the banking sector, and to improve transparency and banking supervision.b1


World Bank promises Ghana US$1.37bn for poverty alleviation


Former president Jerry Rawlings testifies at commission investigating human rights offences during early years of his rule.


New procurement regulations in Ghana implemented to crack down on procurement-related corruption and to increase efficiency in the allocation of national resources.b1


UK pledges US$245m aid to Ghana


Bank of Ghana reduces prime rate to 18.5%


The IMF has formally announced that Ghana has reached the completion point in its reform program under the Highly Indebted Poor Countries (HIPC) initiative, and now stands to obtain a debt write-off of up to US$3.5bn, or US$2.2bn in net present value terms. b1


Regulations on Foreign Investors


Restrictions: Total foreign holdings for any single company may not exceed 71%. Individual non-resident holdings for a single company may not exceed 10%. Resident Ghanaians are not restricted on share holdings.

Taxation: 10% withholding tax on all dividend income. No tax on capital gains.a6


Restrictions: Total foreign holdings for any single company may not exceed 74% (according to the Exchange Control Act 1961). No change for individual nonresident holdings. Ghanaians (both resident and non-resident) as well as resident foreigners can hold any percentage of a list company's share without limit.

Taxation: No capital-gains tax until 2005.a7


Restrictions: 1. No restrictions on repatriation of dividends or net profit, payments of fees and charges for technology transfer agreements, remittance of proceeds from sale of any interest in a free zone investment, and payments for foreign loan-servicing in Free Zone established in 1995. 2. Foreign investors are not required by law to have local partners except in the fishing, insurance, and mining industries.

Taxation: Corporate income tax rate is 32.5%. Capital gains tax rate is 10%. b1