MINISTÈRE DES FINANCES ET DU BUDGET
DIRECTION GÉNÉRALE DU
REPUBLIQUE DU CONGO
Congo issues eight billion CFA francs on the government bonds market
On February 14, 2017 Honourable Thierry Moungalla, Minister of Communication, chaired, in lieu of the minister of finance, the session taking place before the first issue of government bonds via open subscription by the Congolese Treasury.
The ad interim national manager of the Bank of Central African States, Gatien Ondaye Obili, said that the issue of government bonds showed the will of the Congolese authorities to meet the state financing needs by mobilizing domestic resources. He further said that it should enable a good implementation of the monetary policy of the Bank of Central African States.
Moreover, he said that the use of the issue mechanism of government bonds via free subscription to replace the system of direct advances to states had three main advantages : the modernization of the government debt management, the broadening and diversification of the range of financial asset and the improvement of the efficiency of the monetary policy.
The issue of government bonds via open subscription, he added, had three main actors : the Treasury which is the issuer, the national departments of the BCAS (Bank of Central African States) whose role is to organize awards for national treasuries; the settlement and holding of securities cell which is the main depositary and primary dealers who have the subscription monopoly as regard primary issue.
The ad interim manager assured the participants that the central bank was ready to work along with the six states of the Central African Economic and Monetary Community in awareness-raising, capacity building of financial administrations, and technical and organizational assistance activities.
When he took the floor, Minister Thierry Moungalla recognized that the government was convinced that the mobilization of all actors and experts of the government debt market would bring more ideas about the issue of financing.
The importance of the session taking place before the first issue of government bonds via open subscription, he said, was to enable existing financing in countries of the Central African Economic and Monetary Community (CAEMC) be mobilized in order to back up the economic and social action of the Congolese government.
"In this country and elsewhere, the budget policy is key to economic growth spread. A stronger adjustment might have a negative impact on the economic activity and a high social cost. We, the government, our responsibility is to support the demand so that things do not get worse, specially the degrading of the production capacity and the loss of jobs. The first issue amounting to eight billion cfa francs on the government bonds market via open subscription by the Congolese Treasury is part of the aim", the minister said.
He also noted that the government bonds via open subscription mechanism is an opportu-nity for the countries of CAEMC, particularly the Congo, as it enables to borrow at low cost following the bidding auction ; to borrow in local currency and thus reducing the exchange risk , to mobilize and to recycle domestic savings in projects and programmes of real interest for the people of the sub-region, to diversify the investment vehicles, chiefly for investors of CAEMC zone; to enable the emergence of a financial culture, and to improve the cash po-sition of the government by modernizing the government debt management system.
