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Yaoundé - 27 November 2020 -
Finance

Cameroon plans fiscal measures to encourage companies to get listed on the Bvmac

Cameroon plans fiscal measures to encourage companies to get listed on the Bvmac
  • Comments   -   Friday, 06 November 2020 15:47

(Business in Cameroon) - In the framework of the 2021 finance law, the Cameroonian government plans to initiate numerous fiscal measures aimed at encouraging companies to get listed on the regional stock market. The government will suggest the measures during the coming parliamentary session, which will start on November 12, 2020.

According to the draft government text, companies that list their ordinary shares on the Central African Stock Exchange (Bvmac) will benefit from a 25% reduction of corporate tax and a 1.5% reduction of the alternative minimum tax. Also, companies that issue securities on the Bvmac bond market will benefit from a 25% reduction of the corporate tax.

Companies that are reputed for issuing public initial offerings per the provisions of the Ohada Uniform Act relating to commercial companies and economic interest groups, and agree to list or exchange all or part of their equity or debt securities on the Bvmac listing will benefit from a 25% of corporate tax. This reduction will start from the date their securities are admitted on the stock exchange.

As of July 31, 2020, the market capitalization of the Douala-based Bvmac was XAF149.5 billion. Only four companies operating in the CEMAC region were listed on the exchange. They are namely Cameroonian companies SEMC, Socapalm, Safacam, and Gabonese company SIAT Gabon. This means that many companies are still reluctant to get listed on stock exchanges.

Let’s note that on the equity segment, the market capitalization of securities listed on the Bvmac represents only 1.1% of Cameroon’s GDP while in Côte d’Ivoire and Nigeria, it represents 15.7% and 7.7% respectively, according to the Absa Africa Financial Markets Index 2020.  

Sylvain Andzongo

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