The eleventh session of the Permanent Consultation Framework (CPC) of the Public Treasuries with the Treasury Securities Specialists (SVT), opened on September 3 in Brazzaville, is devoted to the challenges of the financial market in the sub-region. Nearly 13 years after its creation, the Treasury securities market is facing a decline in subscriptions, the accumulation of arrears, and the lack of transparency in the activities of the Public Treasuries.
The Treasury securities market of the Economic and Monetary Community of Central Africa (CEMAC) is attracting fewer and fewer investors, while member states need 1,133 billion FCFA from this third quarter. This tremor in the domestic financial market is attributed to the weak capacity of public Treasuries to reassure investors, to respect repayment deadlines and to communicate with the network of SVTs, mainly commercial banks.
The theme of the meeting, ” Development of organizational and human capacities and the issue of ethics in the Cémac Treasury securities market “, practically reflects the market’s concern and the need to adopt corrective measures. According to the manager of the securities settlement and custody unit, Christian Rodrigue Otoly, who is also the rapporteur of the CPC-TP Cémac, as long as the issuing State does not honor its commitments in terms of reimbursement and budgetary management, investors will have difficulty mobilizing on the market.
The financier also criticized the lack of communication between the issuing Treasury and its SVT partners. This type of subscription market requires transparency, it is noted. In short, the issuer must regularly provide material to the SVTs to better sell the debt, in terms of the economic and financial situations of the State (macroeconomic data and others); animation of the SVT network, by providing information on the State’s interventions on the market (programs, timetables) and communication on the announcement of results as well as financial ratings.
” Another challenge concerns the rationalization of state interventions, longer than expected exits, disconnection with calendars, extra-budgetary expenses, cash flow plans that are just papers in drawers, all of this does not help to reassure investors. The strengthening of intermediary activities is also a challenge to be met. Of the thirty SVTs, barely two manage to truly play the role of intermediary ,” indicated Christian Rodrigue Otoly.
The community authorities intend to put in place a new framework (infrastructural, legal and human), with the support of the Bank of Central African States in order to revitalize the domestic market. The objective is to strengthen the attractiveness of the market internationally. Among the solutions envisaged are the improvement of budgetary policies, the effectiveness of monetary policy, the reform of taxation and the professionalism of market players. ” We must promote financial ethics through the training of players ,” insisted the president of the CPC-TP, Raymond Yoka Ikama.
In addition to these measures, there is the need to modernize the method of managing public debt and to ensure active cash management. The single Treasury account remains the royal road, according to another expert. Treasuries are invited to resort to subscriptions at low interest rates and with long maturities. Covering public investments by using the domestic market represents a central element of CEMAC’s development strategy. Member countries need these resources to finance social projects and accelerate the development of their economies.
