Burundi plans to establish a securities exchange before the end of this year for companies to raise funds after a slowdown in commercial bank lending, a Burundi senior central bank official said.
THE BIG PICTURE: Economic growth output in Burundi has slowed down since a political crisis in 2015 sparked by demonstrations against the re-election of His Excellency Pierre Nkurunziza.
Arsène Mugenzi, the head of the central bank’s Capital Market Regulatory Department told Reuters, there were several pension funds and insurance firms that were ready to back companies which will seek capital on the market.
“We have many companies which want to widen their shareholder base in order to buy new materials and increase production,” Mugenzi said late on Tuesday.
He did not give details of the companies which will offer their shares or details of the slowdown in private lending. “What is needed now is to set up a capital market which will boost economic growth and create jobs,” Mugenzi said.
Mugenzi said the central bank had set up a team in 2009 to try to establish the financial market and that they expected it to start late in November or early December.
Local social security firms such as the state-owned National Social Security Institute and the National Pension and Professional Risks Office, are interested, he said.
The central bank had initiated talks with U.S-based funds interested in investing in developing countries, he said, without providing any names.
THE BOTTOM LINE: The Burundi nation has lost direct financial support from key donors, such as the European Union, over accusations of human rights violations and a crackdown on opponents, which Burundi government rejects as mere smearing the sovereignty of the Burundi state.
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