Laying the Groundwork: Can Congo Build Its Own Stock Market?

Currently, there are 29 exchanges, including two regional exchanges, on the African continent. Different countries either have their own stock markets or belong to a regional stock exchange, which fuel their economies and provide individuals with a way to invest in their country’s future.

The Democratic Republic of Congo (DRC) is not one of them. That’s something that Binghamton University Guest lecturer in economics Charles Sebuharara would like to see changed.

On November 13, he gave his first international public lecture on stock markets and how to introduce them to the DRC. It was held on Zoom from the basement of his house and in French, one of his native languages.

Sebuharara is originally from DRC and obtained his bachelor’s degree in financial management from the University of Kinshasa. After obtaining his master’s degree and then his PhD in economy in 1991 and 2005 respectively at Binghamton, he taught at Binghamton University’s School of Management for two years before attending Virginia Tech for postgraduate studies in finance. At the end of this study program, he taught in Virginia Tech’s Department of Finance and for Wake Forest University’s Business School, before returning to Binghamton in 2014. Sebuharara also currently serves on the Investment Advisory Committee of SEED Planning Group, LLC. local financial company.

Sebuharara organized the lecture at the request of some of his former colleagues in the DRC. It was partly inspired by the findings of his graduate thesis on bank credit and investment, and his postgraduate teaching and research work, including his dissertation on aspects of macroeconomics and financial reform in developing countries. His lecture was attended by a diverse audience from the DRC, the United States and Canada, including professors, a bank manager and a senator from Congo, as well as the national president of that country’s audit office.

The DRC, a former Belgian colony, has a variety of natural resources along with educated and talented people, Sebuharara emphasized.

“In Congo, you have a lot of brilliant people with great ideas – entrepreneurs – but unfortunately the country lacks a robust system that can help them implement those ideas and take them to even higher levels of business success,” he said.

Plant seeds

Before moving to the United States, Sebuharara worked for the Central Bank of Congo, where he was one of the first employees responsible for the implementation of the early government bond operation, which could have become the forerunner of a real securities market in DRC . The initiative has not proved successful. One reason, Sebuharara said, is that the DRC has no secondary market where newly issued bonds can be traded freely; such a market would create liquidity, an important feature of any well-functioning securities market.

To fuel investment, the country must first create the conditions for an adequate economic environment and institutional infrastructure. This includes the necessary legal framework to protect property rights and enforce contracts. The accounting profession should also be involved as they should be able to audit companies that choose to be listed on the emerging stock market. Colleges and universities will also need to develop curricula to educate potential investors, regulators, future financial advisors and other investment professionals.

At its core, a well-functioning securities market depends on transparency, Sebuharara emphasized.

“Even here in the US, when companies go public, they must file reports with the Securities and Exchange Commission, where they must disclose information about their companies, opportunities, the risks and their financials; that way people can gain confidence in the system,” he said.

While creating a stock market is not easy, it is certainly possible: some stock markets in Africa were located in countries smaller than the DRC in terms of size, population and economy.

The U.S. stock market itself had humble beginnings more than two centuries ago, initially involving only a small group of people and companies, Sebuharara said. Over the years, it expanded and underwent necessary revisions to financial laws and regulations.

“It wasn’t perfect when it started and it isn’t perfect today, but there have been a lot of improvements,” he said.

Stock markets and finance in general can help individuals and even countries achieve larger, humanitarian goals. Sebuharara often thinks of American entrepreneur Charles Feeney, who founded the duty-free shops often found in airports. The idea made him a billionaire, but Feeney’s goal in life was to give away most of that money before his death. In all, he has given away more than $8 billion while eschewing publicity, inspiring other entrepreneurial philanthropists such as Warren Buffet and Bill Gates.

“He lived a very modest life and donated to many charities, but to achieve that, you have to earn money first,” Sebuharara thought.

Therefore, setting up a stock or securities market can be a game-changer in Congo. While the land may not be quite ready now, Sebuharara hopes officials there will begin the planning process to plant the seeds for the future.

“This kind of system can help the country in the long run, not just by helping the government mobilize resources for key development programs by enabling start-ups and businesses to raise much-needed funding to expand — which they may not. were able to raise money in a different way, but also by giving people the opportunity to invest in their own country, improve the well-being of their families and grow the economy,” he said. potentially lift many people out of poverty.”