Abdoulie "Bax" Touray , the CEO of Sahel Invest has
revealed in a Standard newspaper interview that The Gambia will soon establish
a Stock Exchange which is fine and dandy provided that there are sufficient
multi-national firms already doing business in The Gambia and who have limited
access in the international equity market to continue growing their business.
Mr. Touray cites two obvious candidates that fit the
above description i.e. Standard Chartered and Trust Bank, the first an
expatriate Bank and the second which became a local Bank after the initial
Ghanaian majority shareholders were forced by the regime to divest. Now Social Security is the single biggest
shareholder.
He further suggests that these two business
entities cannot raise funds locally for lack of an equity market that would
have otherwise provided the necessary funds for business expansion. Instead, they raise funds through the Ghana
and London Stock Exchanges in the case of Trust and Standard respectively.
While agreeing with my friend and former colleague that the
availability of an equity market will challenge the country's economy to growth
and development, the absence of regional-class (not to mention world-class)
firms in The Gambia to make it work should be, in our view, the first
preoccupation of the regime. In order to
attract more businesses, a conducive environment must be created by
government that will attract business.
The problem facing the private sector is essentially
two-fold (i) fleeing businesses to Senegal and neighboring countries and (ii)
limited access to credit for those that cannot escape the excruciating tax
burden and extortionist tendencies displayed by the security forces against
businesses.
To entice the brave ones who stayed to hang on a while
longer, and those that fled to return, the regime must demonstrate to the
International Monetary Fund, the World Bank and the donor community in general
that henceforth it will be a responsible and prudent manager of public
resources, something this regime has been unable to do for the last decade.
It
is only through these steps that the private sector will start showing live and
growth to attract regional, world-class companies that can make a Stock Market
a viable option. Anything short of the above will not attract sufficient and viable
firms to make it work.
The record of some African Stock Exchanges, especially in
Rwanda, Swaziland and Mozambique where the general lack of transparent
enforcement of property rights which is linked to the judiciary. We all know the state of the Gambian
judiciary which is not only inefficient but lacks the corporate dispute
resolution capacity, an essential component of a successful Stock Exchange.
