According to Stanislas Zézé, Managing Director of Bloomberg Group, a financial rating agency, Cameroon's savings are largely dormant and not being utilized effectively. He made this statement during the Diamond Capital Convention, an event aimed at discussing financing and capital issues. Zézé emphasized the importance of trust in capital markets, which is facilitated by financial rating agencies like his. The convention, he noted, was one of the best he had attended in the Cemac region, with relevant topics and a well-structured organization.
The convention highlighted the need to address the problems facing the development of the capital market in the Cemac region. Zézé pointed out that excessive regulation can stifle market growth. A rigid regulatory framework can create complex situations for market actors, hindering the development of the capital market. Therefore, it is essential to strike a balance between regulation and market growth. The event provided a platform for stakeholders to discuss solutions to these challenges and explore ways to promote the growth of the capital market.
One of the significant challenges facing the capital market in the Cemac region is the lack of a culture of stock exchange investments. Zézé attributed this to inadequate financial education and rigid regulations. To address this issue, he emphasized the need for continuous education and the creation of platforms for discussions on capital markets. The Diamond Capital Convention is part of this effort, aiming to promote a better understanding of the capital market and its operations.
Another critical issue is the mismatch between the typology of the economy and the financial instruments offered. The economies in the Cemac region are largely informal, with approximately 80% of economic activities being informal. However, the financial instruments available are geared towards the formal sector, which accounts for only 20% of the economy. This mismatch results in dormant savings, which are not being tapped due to a lack of suitable financial instruments.
To address this challenge, Zézé suggested that financial instruments should be designed to cater to the needs of the informal sector. This can be achieved by creating financial products that are accessible to a broader segment of the population. For instance, the introduction of Dangote's shares, which are affordable to a wide range of investors, can be cited as an example of a successful approach. By designing financial instruments that match the typology of the economy, it is possible to mobilize dormant savings and channel them into productive activities.
The Cemac region requires significant investment to drive economic growth and development. According to estimates, the region needs $400 billion annually to finance its development projects. However, the current savings rate is not sufficient to meet this requirement. Zézé noted that Africa has significant savings, but these are not well-organized or mobilized. Therefore, there is a need to create a conducive environment for savings mobilization and to design financial instruments that can tap into these savings.
In conclusion, the Diamond Capital Convention provided a platform for stakeholders to discuss the challenges facing the capital market in the Cemac region. The event highlighted the need for a balanced regulatory framework, financial education, and the creation of financial instruments that cater to the needs of the informal sector. By addressing these challenges, it is possible to mobilize dormant savings and channel them into productive activities, driving economic growth and development in the region.
Key points
- Cameroon's savings remain largely dormant due to inadequate financial instruments and rigid regulations.
- The introduction of affordable financial instruments can help mobilize dormant savings and channel them into productive activities.
- A balanced regulatory framework and financial education are essential for promoting the growth of the capital market in the Cemac region.
