He says if the government could first create the legal instrument for its existence, a stock exchange market would greatly help in turning small businesses into giant corporations that would drive the Gambian economy into the likes of Singapore and other emerging economies and industrialised nations. It would also create space for a fluid financial and capital market.
Explaining an instance by which small businesses can become big corporations through the stock exchange market, Mr Touray said: “For instance, you came in as an individual to start MarketPlace newspaper; later on you realised that you need to expand the business, so you go to the stock exchange market to float your shares for interested investors to take ownership then the business becomes an ‘invisible hand’, a corporation that is largely beyond the control of individual firms.”
He also cited the case of Henry Fords, founder of Ford Motor Company, who started the company as an individual but later floated its shares in a stock exchange and people took ownership of it and the company became an ‘invisible hand’.
It is difficult for companies to metamorphose to big corporation in the absence of stock exchange market, he says. With a stock exchange, companies that want to expand can go and float their shares for more people to take ownership of them and then they would expand.
“Without a stock exchange, if I want to buy shares in the MarketPlace, where do I go?” he asked. “Gambians trade in everything but shares. All the countries in West Africa now have a stock exchange except The Gambia.”
He explains further: “If I want to buy fish, I go to the market, if I want to buy milk I go to the supermarket. If I want to buy shares, where do I go? If Sierra Leone that is just out of civil war can have a stock exchange, The Gambia can do it too.”
Mr Touray said the private sector is ready for a stock exchange but the government has to first create the legal instrument for its existence. “You don’t want to have a situation where you establish a stock exchange and you don’t have anybody to control you,” he said.
Aside from the stock exchange, Mr Touray says there are number of challenges facing the Gambian private sector. “The number one challenge is that, cost of factors of production is very high in this country,” he notes.
Again, despite the numerous banks in the country, the economic analyst says, access to finance is virtually dead.