There is a growing concern within the financial sector about companies using short-term funds to finance long-term projects instead of raising long-term capital through the GSE. A classic example is the case of Astek industries, producers of In su mineral water and Refresh fruit drink, which is in financial distress such that its assets are being auctioned to offset its indebtedness to a merchant bank. Its total debt is 14 billion and most of these debts are short-term funds which were used to finance long-term projects. If Astek had been a public quoted company, it could have raised capital either through rights issues or offer bonds to the investing public to finance most of its long-term projects or clear its debts (Graphic 18/03/03). It is worth noting that it is more beneficial to finance short-term projects with short-term funds and long-term projects with long-term funds. And since corporate development is normally of long-term nature, it is prudent for companies to position themselves strategically to take advantage of raising funds from the GSE.
To this end the President of the Republic of Ghana has stated that he will evolve policies that will enhance the "capital market where private businessmen can borrow efficiently and cheaply" (Graphic 09/09/02). It is important to note that the GSE is a significant arm of the capital market. Again, the Cocoa Processing Company (CPC), the latest addition on the GSE, has stated that it took their leading broker NTHC, " a year of hard work" for CPC's initial public offer to take off (Daily Graphic 16/09/02). This effort alone was a serious drain on the resources of CPC. It is worth noting that NTHC is among the best brokerage firms in Ghana, and if it took them one year to float CPC's shares then there is need to find out the kind of challenges the directors of businesses face in raising the supposedly cheap capital. Also, long-term capital is at a rudimentary state of development in Ghana as the total capitalization of the GSE is small even by emerging market standards.
There is therefore the need to evolve strategies and policies that will hence the trading volumes of the exchange to make it more liquid (GPRS 2002-2004).