The opacity in their management fueled by the eternal conflict between on the one hand their social and political functions and on the other hand, their economic missions, makes them almost all incapable of being forced to comply with the transparency requirements of the financial markets.
It was one of the big announcements of the “Financial Market Day” organized by the Central African Financial Market Supervisory Commission CONSUMAF on March 3, 2020 in Brazzaville, Congo: Equatorial Guinea had already decided to list three of its companies on the Central African Securities Exchange (BVMAC). It is the National Bank of Equatorial Guinea; Equatorial Telecommunication Guinea (Getesa); Electricity Company of Equatorial Guinea (Segesa).
These three companies are part of the list of Equatorial Guinean companies to be listed on the stock market, list sent by the Minister of Finance, Economy and Planning of Equatorial Guinea to BEAC on January 31, 2020, in application of the regulations. Cemac relating to the IPO of companies with public participation.
Legislative frameworks
Meeting on October 2, 2019 in Yaoundé, the members of the Ministerial Committee of the Monetary Union of Central Africa UMAC had indeed adopted the regulation relating to the initial public offering of the interests of the States and their dismemberments, in the companies operating in CEMAC. According to this regulation, the purpose of which is to revitalize the unified stock exchange in accordance with article 8 of the Additional Act of February 19, 2018, the Cemac member states had until February 19, 2020, to “proceed with the partial sale or total on the stock market of their holdings in the capital of public, parapublic, or public-private partnership companies, in particular within the framework of a privatization program ”.
The additional act of February 19, 2018 also prescribed for the States of the sub-region, “the adoption of legislative frameworks making compulsory the listing or the opening on the stock market of the capital of companies having for usual profession, management or conservation public savings (banks, insurance companies, etc.) and multinational companies or subsidiaries of multinationals operating on the territory of the Member States’.
At the time of writing, this deadline has passed. Only Equatorial Guinea has already started the process of compliance with this regulation. More worryingly, the legislative frameworks making these IPOs compulsory have not yet been adopted (the case of Cameroon for example). In addition, and in the absence of a clear and voluntary approach on the part of the States, the private sector companies concerned by this regulation are also waiting.
Explanations
So why is this international settlement so widely trampled by the parties that adopted it? “The conditions for listing on the stock market are particularly rigid,” said a senior official at the Bank of Central African States BEAC. Who continues: “To go public, the company must be profitable, all its financial information must be available; it must have made a profit over the previous 3 years; that it has distributed dividends at least once in the previous three years … In all countries of the sub-region, public enterprises rarely meet all these criteria. There are only a few, especially those with foreign capital, that can achieve such a level of transparency. ”
A former Deputy Managing Director of a parastatal company in Cameroon is more prosaic: “My experience with these companies has taught me one thing: it is not economic profitability that constitutes the” Mindset “of their management. As long as the manager of a parastatal enterprise fulfills the political and social objectives which are discreetly and even secretly assigned to him, he has a good chance of remaining at the head of this enterprise even if it loses money every year ” , he begins, before continuing: “aware of this priority of” political “and” social “, the boards of directors generally validate-for little the CEO knows how to” manage “its members-the accounts of which we would have a lot to say if we wanted to be a little rigorous. ”
The second explanation relates to the regulation itself. “It is a Community regulation, which therefore has the value of an international treaty which, in the hierarchy of legal standards, is above national instruments. States which have duly signed it must comply with it! “An executive from the Central African Financial Market Supervisory Commission (COSUMAF) gets angry.
“It is a non-binding regulation, since it does not include sanctions in the event of non-application. So the states take their time. And this is one of the major weaknesses of this regulation.