(Business in Cameroon) - Despite the putsch of August 30, Gabon, a major player in the CEMAC capital market, will continue to meet its commitments in the market thanks to mechanisms that have been in place in the zone for several years. The assurance was given by Harvest Asset Management, a leading portfolio manager in the CEMAC zone, with CFAF260 billion of assets under management as of end June 2023.
“The financial market has not experienced payment defaults for debts denominated in local currency despite various [political] upheavals in Chad (2021) and the Central African Republic (2020). We believe that Gabon will not stray from the rigor imposed by the system unless it decides to leave, which is an unlikely event,” the asset manager explained in an op-ed sent to the press on the evening of August 30.
The mechanisms put in place to guarantee investor confidence in the Central African Stock Exchange (BVMAC) assigns specific roles to various players. The central bank BEAC, as the central securities depository, is the ultimate guarantor of smooth operations in the market. In addition, the central bank, which is "in charge of payment systems in the sub-region, has signed agreements with the various public treasuries in the CEMAC sub-region. Through the agreements, the treasuries authorize automatic debits to service their debts on the regional financial market,” Harvest Asset Management adds indicating that any country that defaults on payments will never be able to issue securities on the local financial market again.
The assurance comes against a backdrop of political crisis following the coup in Gabon yesterday (August 30). The situation is concerning to investors, who fear the country will not be able to fulfill its financial commitments. According to Harvest Asset Management, Gabon is the second largest issuer in the Central African region, with 24.7% (CFAF1,452 billion) of the outstanding debt in the BEAC public securities market (CFAF5,881 billion as of end July 2023). On the common financial market (BVMAC), it is the leading issuer with a bond stock of CFAF463 billion, or 38.6% of outstanding debt on the listed market, as of August 25, 2023. In addition, Libreville (its capital) is home to the headquarters of the regional market regulator, the Commission de Surveillance du Marché Financier de l'Afrique Centrale (Cosumaf), since the merger of the Central African financial markets.