Invited by the Minister of Finance and Budget, Calixte Nganongo, the pan-African commercial financial rating agency Bloomfield investment corporation presents its working methodology, from Monday 21 to Friday 25 September 2020, in Brazzaville.
In his presentation of the first day, which took place at the headquarters of the Ministry of Finance, in the presence of Calixte Nganongo and his colleague, Budget Delegate Ludovic Ngatsé, the CEO of this agency, Stanislas Zeze recalled that a financial rating agency is a body responsible for assessing the risk of non-repayment of the debt or borrowing of a State, a company or a local authority, and never an individual. In other words, it assesses the ability of a country or entity to manage public affairs in a transparent and good governance manner in order to gain credibility with financial investors.
The criteria on which a rating agency bases its ratings include both qualitative and quantitative criteria. For example, qualitative criteria include the domestic political environment (stability, risk of political crisis); external relations (risk of conflict or crisis); social structures; etc. At the qualitative level, the agency notes income growth, operational profitability, budget balance, changes in the budget balance and major balances; etc.
However, constraints linked in particular to asymmetric information make it difficult to read the solvency situation of the State and companies, causing them to lose many opportunities to finance their projects with investors.
The importance of lifting constraints through rating
The Minister of Finance and Budget, Calixte Nganongo, has invited the Pan-African rating agency Bloomfield investment corporation to lift these constraints and help the financial centre of Brazzaville to become dynamic and occupy a major place in the regional financial community.
"By using the financial rating tool, the Republic of Congo aims at promoting the access of the State and companies of all kinds to funding on the capital market of the Economic and Monetary Community of Central Africa (CEMAC)," his colleague Ludovic Ngatsé said.
According to the latter, the choice of the Pan-African rating agency Bloomfield Investment Corporation (created 13 years ago in Abidjan - Côte d'Ivoire), has a double advantage: that of being an agency based in Africa (therefore more imbued with the realities of countries in the sub-region) and that of rating entities in local currencies (in this case in CFA francs for the CEMAC zone). It is therefore a new experience. Congo, for example, was previously rated in foreign currencies by foreign (non-African) rating agencies.
The Minister of Finance and Budget is relying on Bloomfield investment corporation to launch, as soon as possible, the financial rating of the Republic of Congo in local currency; to better highlight the country's capacity to honour its commitments, especially domestic commitments.
Calixte Nganongo also plans to launch the first issues of negotiable debt securities by public and private companies in the region; to support the financial rating of credit institutions, with a view to reducing information asymmetry, boosting interbank exchanges and managing bank treasury more flexibly. In addition, it plans to promote the financial rating of 10 public companies in order to support their financing on the Central African Stock Exchange (BVMAC) and to promote the creation of a stock market index for CEMAC. It also intends to support the financial culture of economic actors, with a view to achieving the ''Brazzaville Objective, a major financial centre within the Economic Community of Central African States (ECCAS)''.
The Press Office of the Ministry of Finance