Interview - 'Douala stock exchange can be transformed'

Lamngwa Brezhnev, stockbroker, financial expert and writer on capital market issues, explains how the Douala Stock Exchange can be made more profitable.

Why has the Douala Stock Exchange not attracted much public interest since creation?

We operate in an economy where people don't quite understand the role of the financial market or stock exchange. People still run businesses without thinking of the future - what could happen in the event of their death. Most of such business people are afraid that if they enlist their companies on the stock exchange, it will mean selling them off to other people, thereby losing control. You can sell up to 48 per cent of your company and still retain majority of shares. Nigeria's business mogul, Aliko Dangote, is today one of Africa's richest men. Almost all his companies are listed on the Nigerian Stock Exchange and he makes more money because he is on the stock exchange.

What should therefore be done and by who for it to function optimally?

First, the public doesn't quite understand what the Douala Stock Exchange is all about. So, they need some education. They don't understand how it can help or benefit them. It is because of the stock exchange that Nigerian banks are able to raise capital and some of them now operate in Cameroon.

Secondly, government needs to sensitise the public. Government can organise such programmes on TV and radio and Cameroonians educated for about a year. At the end, they should be able to better appreciate the importance of the capital market. Armed with such knowledge, if companies listed on the Douala Stock Exchange sell shares, the public will be interested. But if today companies start selling shares, people will be skeptical because they are afraid of losing money.

Government also needs to partner with private sector organisations like GICAM and the Cameroon Chamber of Commerce, Mines, Art and Handicraft to educate people through seminars. In addition, government needs to set up a stock exchange regulatory body known as the Securities and Exchange Commission, SEC. It can be set up through an Act of Parliament and will be in charge of defining the modalities for the registration of capital market operators such as stock brokers, issuing houses, investment advisers, financial consultants, solicitors to the offer, reporting accountants, independent auditors, mutual funds, etc.

The capital market is a place to canvass for funds from investors such as households, the common man, etc. For example, the African Independent Television, AIT, in Nigeria is owned by DAAR Communications. DAAR offered shares of Five Naira (about FCFA 16) to the public. You don't need to sell shares for FCFA 100,000, FCFA 200, 000, FCFA 500,000, etc, to the public. You can reduce it to FCFA 1,000 per share like in the credit unions to enable the common man participate.

What future do you foresee for the Douala Stock Exchange?

The future is bright. Often, foreign businessmen invest in the country using their company names. With the Douala Stock Exchange functioning well, more people will be encouraged to set up and register corporations, limited liability and public companies. After which they can seek partnerships with foreign investors. It should no longer be a question of asking foreign investors to come and employ our people. That is how important the capital market is to the economy.