Wednesday, November 30, 2022

Finance Minister Lays Capital Market Bill 2020

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By: Kebba AF Touray

Mambury Njie, the Minister of Finance and Economic Affairs, on Tuesday 9th November 2021, tabled a bill entitled The Gambia Market Bill 2020, before the lawmakers for enactment.

Laying the bill, Minister Njie explained that a capital market is a place for trading securities such as bonds and stocks with longer maturity than one year.

“Second, by channeling savings and investments between suppliers of capital and those in need of capital, Capital markets can improve risk sharing and capital allocation efficiency in the real market, reduce capital flight, and ultimately boost economic growth and welfare”, he remarked.

He said that there is a positive relationship between capital accumulation and real economic growth and in relating this to our national circumstances, capital markets are therefore, critical enablers to this phase of The Gambia’s economic reform process.

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“They can also contribute greatly to the maintenance of the private sector as an engine of growth in The Gambia. Undeniably, within investment frontiers, large and small companies serve as the primary channel of businesses in a society. In order for them to promote economic growth, they require funds to stay afloat”, he told the assembly.

Similarly, he echoed the Government also requires funds to carry out capital-intensive projects that will be beneficial to the inhabitants of the country.

Is he said it is evident that Government’s overreliance in bank finance and treasury bills have, proven to be unsustainable and has led to unintended consequences related to high cost of borrowing which crowded out the private sector, increased potential for political interference and have also  created a general deterioration of the country’s fiscal position.

He explained that on the supply side, retail and institutional investors have for too long, lacked high quality and liquid domestic saving vehicles that will not only yield returns on their investments but also provide sustainable financing streams for our nation’s achievement of the Sustainable Development Goals (SDGs).

Guided by such considerations, he informed the assembly that the Gambia Government took a decision to establish a Capital Market and established a national task force to develop and launch a systematic, functional capital and securities market for The Gambia, including Finance Ministry, Central Bank of The Gambia, the Financial Intelligence Unit and the Private sector.

“The regulation of a capital market encompasses the regulation of securities. These rules enable the capital market to function more competently and fairly. A well regulated market has the prospective to boost additional investors to participate, and contribute in, promoting the development of the economy”, stated Njie.

Therefore, he said the draft Bill when passed by the National Assembly will be the regulating document for a Capital and Securities Market that is Dynamic, Fair, Transparent and Efficient, and well placed to contribute to the Nation’s Economic Development.

Njie reiterated that the bill if passed will also specifically makes rules and regulations for;

The operation regulation of the market;

  • Registration and regulation of securities exchanges and other self-regulatory organizations;
  • Registration and regulation of the issuance of securities;
  • Intervene in the management and control of failing capital market operators; and
  • In appropriate circumstances, impose penalties and levies on defaulting capital market operators.
  • “It is worthy to note that The Gambia Capital Market and Securities Bill 2020 also establish two other key bodies.  These are, the Capital Market and Securities Authority and the Capital Market Tribunal”, said Minister Njie.
  • He said further that the Capital Market and Securities Authority will be responsible for implementing the Capital Market and Securities Law and will also serve as a quasi-judicial fact-finding body.
  • Essentially, he said it will provide the avenue for market operators against whom complaints have been made (by investors and the Authority alike) to be heard prior to the determination of the complaint by the Tribunal. 
  • He explained that the Tribunal on the other hand is established under the Bill to adjudicate on any question of law or dispute involving; 
  •  Decision or determination of the the Capital Market and Securities Authority in the operation and application of the Capital Market and Securities Bill, and, in particular, relating to any dispute between;
  • Capital market operators;
  • Capital market operators and their clients;
  • An investor and a securities exchange or capital trade point or clearing and settlement agency; or
  • Capital market operators and self-regulatory organisations;
  • The Authority and a self-regulatory organisation;
  • Capital market operator and the Authority;
  • An investor and the Authority;
  • An issuer of securities and the Authority and;
  • Disputes arising from the administration, management and operation of collective investment schemes.
  • The financial implication from approving this bill, Njie explained will emanate from establishing the Capital Market and Securities Commission and the Capital Market Tribunal. The overriding consideration in the establishment of the above is to create a balance between the needs for regulation of the market on one hand, and their accountability and grievance redress mechanism on the other.
  • He described the laying before the National Assembly for enactment, The Gambia Capital Market and Securities Bill 2020 as a momentous milestone in our mission to end poverty and increase shared prosperity.
  • “By providing for sustainable financing of strategic sectors of our economy, the launch of a capital market will also boost financial stability while reducing vulnerabilities arising from external and internal stressors”, he said.
  • He added that in the current era of COVID-19, we can all relate to such vulnerabilities and as such we deem it a national duty to facilitate a smoother flow of both global and domestic capital to meet The Gambia’s financing needs for investments, equitable growth and jobs.
  • Anchored on all the benefits associated with the development financing-financial inclusion-shared prosperity nexus, Minister Njie requested the legislature to consider and enact the Gambia capital market and securities bill 2020.
  • “Honorable Speaker, I rise to invite the National Assembly to consider and enact the bill titled the Gambia Capital Market and Securities Bill 2020. I beg to move”, moved Minister Njie.
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