The Role of Capital Markets in Economic Growth: Evidence from Ghana

Abstract

In the last two decades, the most dominant theme in development strategies in Africa, especially Ghana, has been the promotion of free markets and a decrease in state intervention in many aspects of the economy. International organizations like the World Bank, IMF and donor countries have eulogized the role of the private sector in economic growth and acknowledged the need to facilitate private sector development. The private sector requires the creation of an enabling environment to thrive and flourish. A key factor here is the healthy growth of the capital market, which in turn improves the private sectors access to capital. The development of the capital market is preceded by the development of the financial sector. The financial sector channels savings and investments to seekers of capital. This study seeks to assess the role of the capital market in propelling economic growth in Ghana.