Lambert Ifoko, Tax and Customs Advisor, representing Jean-Baptiste Ondaye, Minister of Economy and Finance opened, Thursday May 4, 2023 in Brazzaville, the work of the consultation meeting with the Specialists in Treasury Securities (SVT), under the theme: “Participation rate of primary dealers in Treasury securities issues: current situation and avenues for improvement”, under the coordination of Serge Daniel Gassakys, National Director of the Bank of Central African States (BEAC) .
During this opening ceremony, Lambert Ifoko, indicated that “Since 2017, the year of its entry into this consultation framework, the Congolese public treasury has been very active in soliciting the market several times, going from 13 billion to the end from its first year to more than a thousand billion in 2023. That is to say a total outstanding amount of 1,828 billion 717 million 530,000 F CFA. Detailed as follows: 1.585 billion 403 million. 530,000 F CFA in assimilable Treasury Bonds (OTA) against 243 billion 314 million F CFA in assimilable Treasury Bonds (BTA).”
According to the Minister's representative, "Despite this late entry, the Congolese public treasury is counted to date among the three most active treasuries in the CEMAC Zone (Central African Economic and Monetary Community), taking into account the amounts raised, regularity on the market, subscription rates, and it has the largest network of Specialists in Treasury securities in the area,” he continued.
Also, he explained, thanking the Minister of Economy and Finance, for the tireless efforts that he continues to deploy to support the Public Treasury, namely, “the improvement of the management of Securities and its organization ; the predictability and execution of issuances; strengthening communication with investors; the ongoing reform of the Treasury single account and monitoring of the cash flow plan.”
Presentation by the BEAC representative, on the theme of regional consultation
The presentation of the CEMAC zone market focused on several points, namely: “the evolution of the Treasury securities market”. “The CEMAC Treasury securities market was established in October 2008,” he recalled.
According to the BEAC representative, “the first BTA issues by the Treasurys of Cameroon and the Central African Republic (CAR) gave rise to a total outstanding amount of 51.6 billion FCFA. This outstanding amount today stands at 5,687.02 billion FCFA. At the end of March 2023, the evolution on the primary market noted a drop in the average cost of resources which is at 6.68%, the participation rate of SVTs in the issues of Treasury securities at 24.64% and the rate subscription to Treasury securities issues at 65.78%; On the secondary market, SVTs remain the main holders of CEMAC Treasury securities with 3,774.6 billion FCFA.”
Regarding “the outstanding CEMAC Treasury securities as of March 31, 2023 amounts to 5,687.02 billion FCFA.
For Congo, the structure of the outstanding amount is 243 billion in BTA and 1,585,404 billion in OTA. We note the inversion of the structure of the outstanding Treasury securities issued by the Congolese State; an increase in the share of the outstanding OTAs, in particular, the 6 years which represent 11.9% of the overall outstanding, at the end of March 2023.
Out of the six countries in the CEMAC zone, three countries stand out, and Congo is in the lead in terms of outstanding amounts.”
For the BEAC representative, “we note a significant improvement in Congo's yield curve, which is even closer to that of Cameroon in the long term, but remains distant in the short term.
As for the debt repayment profile on the CEMAC Treasury market in March 2023
There is a strong concentration of outstanding amounts in the short and medium term, mainly for Assimilable Treasury Bonds.
A positive point for Congo, the reimbursement concentrated in 2017 extends today until 2032,” he explained.
In terms of structure, CEMAC is positioned ahead of the UEMOA zone, thanks to the efforts of the BEAC and other market participants.
Presentation of the Public Treasury by Raymond Yoka-Ikama, head of the Securities department
The Market started with 51 billion and today, we are at more than 5 billion. The health crisis has accentuated the difficulties in the market, he explained. The rate of coverage of needs, the subscription rate of SVTs and the participation rate are closely linked to the success of the auctions, he continued.
After this brief introduction from the Head of the Securities Department, his intervention was made in 5 points, among others: Reminder of the provisions of the specifications: “The SVTs occupy
an important place on the market, they are privileged partners of the Treasury. That said, a reminder of the obligations and commitments of SVTs defined by the specifications (in particular, on the level of participation) must be taken into account, in particular, on participation in broadcasts”; Evolution of Treasury interventions on the CEMAC market”;
Generally speaking, the speaker emphasized, “the need expressed is undercover. The amounts paid are below the amounts subscribed. The subscription rate is around 92% in BTA and 82% in OTA; The SVT participation rate is around 21%. For Congo, the strong participation in emissions comes mainly from non-resident SVTs but also the average cost of resources still remains high compared to the reference transmitter. Participation rate of SVTs in emissions “In BTA, those participating are Afriland, BGFIBANK CG and ECOBANK CG. For the rest of the SVTs, participation is average, but there are some banks which are trying to progress in terms of participation, such as CBC and LCB. On a regular basis there are almost 15 SVTs who participate in the broadcasts. In terms of minimum awarded, those who participate contribute at least 5% of the amount awarded in BTA, in the lead we have AFRILAND. In terms of OTAs, UBA CG and BGCFI GAB stand out,” he said.
The Communication Unit of the Ministry of Economy and Finance