West African regional bourse reaches out to SMEs

SMEs form 80% of our zone’s economic fabric. The BRVM owes it to them to allow access to market financing.


Edoh Kossi Amenounve, CEO of the Bourse Régionale des Valeurs Mobilières (BRVM), talks to Hichem Ben Yaïche about the role of this West African stock exchange in financing the regional economy.  

In step with the rest of Africa and most of the emerging markets, West African entrepreneurs are looking for alternatives to traditional sources of finance for their operations. The stock market can be an important part of raising capital. But what is the role of the regional stock market in helping accelerate economic growth?

The Bourse Régionale des Valeurs Mobilières (BRVM) is the regional stock exchange serving members of the West African Monetary Union (WAEMU) – Benin, Burkina Faso, Guinea Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo. It is based in Abidjan, Côte d’Ivoire.

Hichem Ben Yaïche spoke to its CEO, Edoh Kossi Amenounve, to find out how it finances the regional economy, how it engages with SMEs, and how it is incorporating new technologies into its work.

In terms of your goals, are you satisfied with the strategy that the BRVM has taken so far? Is it time for a rethink or a change of course?

The implementation strategy has paid off in recent years. As of 2012, the goal was to establish our stock exchange as a force to be reckoned with on a regional, continental and international scale. We then had to make it attractive, so that new businesses would want to be listed. Finally, our strategy aimed to make the BRVM an actor at the forefront of African innovation.

The BRVM joined the prestigious MSCI index in 2016; it has signed partnerships or led actions with several actors in global finance, such as Bloomberg, Nasdaq, Refinitiv (formerly Thomson Reuters), Paris Europlace, the London Stock Exchange, and the Shanghai Stock Exchange. Over the last five years, the BRVM has admitted nine new companies, which is one of the best performances in Africa.

Finally, in 2016 the BRVM became the first Islamic stock exchange in Africa by rating five Islamic bonds issued by three countries (Côte d’Ivoire, Senegal and Togo) for a total value of $1.3bn.

In the last year, the BRVM has played a major role in issuing bonds intended for the African diaspora (diaspora bonds) from the Senegal Housing Bank (Banque de l’Habitat du Sénégal), which has been successful, mobilising FCFA 20bn (€30.5m).

Without a doubt, we have to adapt our strategy to suit the evolving circumstances of our Union and to global trends, at the same time as consolidating our existing achievements.

Over the years to come, there will still be a number of challenges to meet, particularly market liquidity, training for stakeholders and investors, dissemination of disclosures by the listed companies and finally, the attractiveness of the BRVM for SMEs.

Besides this, another of our priorities will be to work with other African stock exchanges on the AELP (African Exchanges Linkage Project), supported by the African Development Bank.

Have the internal reforms been completed?

The reforms that aim to develop the market have almost all been launched, and many of them are complete. Some still have to be finished off as soon as possible – such as launching the online Stock Exchange and the BRVM Academy’s activities, expanding the range of services offered by the Central Depository/Settlement Bank (DC/BR), and digitising some of our operations.

What role does the Stock Exchange play in financing the economy in the region?

The countries of the Monetary Union and the private sector have, respectively, raised €9.29bn and €1.47bn in bonds on the regional financial market, since 1998. These resources make up 10% of the zone’s GDP, and have helped to finance all business sectors, including construction, energy, mass retail, transport, telecommunications and banks.

Edoh Kossi Amenounve has been CEO of the BRVM since October 2012.

On the issue of wealth redistribution, by way of example, between 2016 and 2018, the Central Depository/Settlement Bank distributed €695m in interest, and €464m in dividends to its investors. In total, FCFA 759.98bn (€1.16bn) was re-injected into the sub-region’s economy over this period.

The BRVM contributes to financing state and private sector businesses while at the same time helping investors to benefit from the fruits of economic growth through the payment of dividends and interest.

How do SMEs fit into your approach?

As you know, SMEs form 80% of our zone’s economic fabric. The BRVM owes it to them to allow access to market financing, especially long-term resources. To this end, our Stock Exchange opened an SME-dedicated sub-fund on 19 December 2017, called BRVM Small Caps.

This fund will enable SMEs and businesses with high growth potential to open their capital to the public and to raise capital over the long term so that they can finance their development.

To sustain this fund, the BRVM has launched, in partnership with the Casablanca and London stock exchanges, an SME capacity-reinforcement programme called Elite BRVM, which is an offshoot of the Elite programme developed by the London Stock Exchange.

The programme aims to prepare SMEs to access long-term financing on the capital market. In two years, we have managed to recruit 30 SMEs through this programme from nearly all countries in our Union, so that they can benefit from this preparation. We hope to gradually list them on the BRVM over the next few years.

What are you doing to increase the attractiveness of the BRVM?

The BRVM is following its strategic plan – one of which is to promote the market across the region by holding ‘BRVM Days’, which we have been organising every year in at least three capitals of WAEMU.

These events will give us the opportunity to meet businesses, individual and institutional investors, and most importantly, to foster a stock market culture within the region. The results of these actions are encouraging, as the number of securities accounts that were opened in the books of management and brokerage companies doubled between 2012 and 2018. Over the same period, we registered an average of two public offerings per year.

Our awareness-raising activities with issuers on the subject of financial disclosures have improved the dissemination of financial information. Investors now have access to the available stock market information anywhere and any time, thanks to our new website and our mobile application, etc.

Internationally, since 2014 the BRVM has been stepping up its promotion on the global financial markets, through its roadshows, called BRVM Investment Days. So far, five big financial markets: Paris (2014), London (2015, 2018), New York (2015, 2018), Dubai (2016) and Johannesburg (2018), have hosted this important event.

The players forming the financial ecosystem of these financial markets, which include international brokers, banks, financial data providers, ratings agencies, portfolio managers, and private equity funds, have discovered the investment opportunities that the BRVM and the WAEMU regional financial market has to offer them.

How do you cooperate with other economic players?

In carrying out its activities, the BRVM works in close collaboration with a number of regional and international institutions (banks, insurers, pension funds, sovereign wealth funds, etc.) and public and private sector actors.

For example, to promote entrepreneurship in the Union countries, we support inter-professional associations, Chambers of Commerce and other government agencies in helping their members access the capital market in order to finance their growth. This support takes the form of Memoranda of Understanding. These same agreements are also made with private equity funds in order to encourage their exit on the stock market.

How is the proliferation of new technologies changing your practices?

Information technologies have always been at the heart of the BRVM’s activities. Since its creation, it was decided that the stock exchange would be a completely electronic one. Today, shares are rated continuously and market information flows are disseminated in real time on the platforms of global market data providers such as Bloomberg, Refinitiv, FactSet, etc., and also on our mobile application, our website, and by SMS for subscribers who sign up for it, etc.

These initiatives will build on the dynamism of the BRVM, which involves using new technologies as a lever for developing stock market culture and reducing the asymmetry of information.

For the BRVM, new technologies are an opportunity to improve the quality of our services and develop new ones. Some emerging technologies have a great disruptive potential and can seriously call into question the way that financial services currently work. This is what’s happening with blockchain, and developments in Artificial Intelligence and Big Data, etc.

It is therefore important for institutions like ours to place ourselves at the heart of the digital transformation and to adapt our services to the needs of investors.

To do this, we started launching our Fintech laboratory last year, to stimulate the development of technological solutions adapted to the needs of the WAEMU region’s financial system, and also to enable its technology start-ups to work with existing financial institutions to help them to grow. 

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