(Business in Cameroon) - Since May 2006, when the first company entered (Société des eaux minérales du Cameroun) the Douala Stock Exchange (DSX), Cameroon’s stock exchange, this financial market has had a total of only 500 billion FCFA in stock market capital, stated Finance Minister Alamine Ousmane Mey, during a presentation at Cameroon Business Forum (CBF) – an exchange platform between the government and private sector business entities. The Finance Minister also specified that DSX capital represents barely 3.25% of the country’s GDP against the banking sector’s 16%.

This nine-year performance for the DSX, which was created in 2001, but began activity in 2006, is all the more worrying as, according to the Minister Alamine Ousmane Mey’s figures, the share portion of this financial market totals only 164 billion FCFA, compared to the bond compartment’s 337 billion FCFA. Yet, when the DSX was launched, the Cameroonian government wanted to list some ten companies in the first five years of operation.

Fourteen years after being created and nine years after its launch, the DSX has only three share listings: SEMC, Socapalm and Safacam.

Too expensive

The Cameroonian private sector seems to have snubbed the DSX. Yet, businesses that continue to complain about their difficulties accessing financing in Cameroon, have been using this stock exchange in the country’s economic capital where there are 79 of the 100 top companies in terms of sales figures, according to National Statistics Institute (NSI) data. Even the State’s tax incentives, particularly a significant reduction in income taxes for companies that use the DSX, were unable to convince investors to raise funds on the stock exchange.

Companies have attributed this lack of interest to the high cost. It is expensive enough for banking institutions, approved investment service providers (ISP) to the DSX, to levy unfair competition against the Cameroonian financial market.

Indeed, reliable sources have stated that it is not rare for ISPs on the Douala stock market, playing on the DSX’s high costs, to turn companies seeking funding to their own loan portfolios.

In such instances, these stock market intermediaries suggest much more competitive loan interest rates much to the chagrin of the DSX which is unknowingly helping to boost the bank loan market.