(Business in Cameroon) - The Development Bank of Central African States (BDEAC) recently managed to raise XAF106.8 billion (over XAF6 billion more than the XAF100 billion it requested) via bond issuance on the  Central African Securities Exchange (BVMAC).  

This operation (for which subscriptions were opened from December 21 to 29, 2020) is the first fund-raising operation organized on CEMAC's unified financial market since the adoption (in July 2019) of a new configuration for the regional financial market. The said market now has a single regulator (based in Libreville-Gabon), and single stock exchange (the BVMAC then based in Gabon and the Douala Stock Exchange of Cameroon were merged), headquartered in Douala.

The BDEAC's bond issuance raises hopes for an effective revitalization of CEMAC's financial market, which has never really taken off despite the various incentive measures taken by authorities. For instance, while the market capitalization of the BVMAC’s equity segment was only 1.1% of Cameroon’s GDP, in Côte d’Ivoire and Nigeria, it represents 15.7% and 7.7% respectively, according to the Absa Africa Financial Markets Index 2020.

Unfulfilled goals

To establish BVMAC as a major instrument for financing CEMAC economies, six new companies will get listed on the exchange, CEMAC countries promised. This promise was a key point of BVMAC’s 2020 action plan but it was not fulfilled that year, meaning that the stock exchange was unable to fulfill all of its 2020 plans.

As Jean Claude Ngwba (BVMAC's Managing Director) explains, this action plan includes actions to reach a minimum market capitalization of XAF1,200 billion on the equity compartment (ed. note: at the end of July 2020, it was XAF149.5 billion), and a minimum of XAF1,000 billion on the bond compartment, against XAF748.7 billion at the end of July 2020.

According to a financial expert, even with the arrival of the six companies and the issuance of new bonds such as that of the BDEAC, it will be difficult for the BVMAC to achieve those goals this year.  

BRM